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A JAPANESE RECONSTRUCTION OF MARXIST

THEORY
A JAPANESE
RECONSTRUCTION OF
MARXIST THEORY

Robert Albritton
Department of Political Science
York University, Ontario

Palgrave Macmillan
ISBN 978-0-333-39592-9 ISBN 978-1-349-18162-9 (eBook)
DOI 10.1007/978-1-349-18162-9

© Robert Albritton 1986


Softcover reprint of the hardcover 1st edition 1986

All rights reserved. For information, write:


St. Martin's Press, Inc., 175 Fifth Avenue, New York, NY 10010

Published in the United Kingdom by The Macmillan Press Ltd.


First published in the United States of America in 1986

ISBN 978-0-312-44061-9

Library of Congress Cataloging in Publication Data


Albritton, Robert, 1941-
A Japanese reconstruction of Marxist theory.
Bibliography: p.
Includes index.
I. Marxian economics - Research - Japan. 2. Uno, Kozo,
1897 -1977. I. Title.
HB97.5.A44395 1985 335.4'01 85-11970
ISBN 978-0-312-44061-9
Contents
Preface VB
1 Introduction 1

PART I POLITICAL ECONOMY

2 The Uno/Sekine Approach and Marx 9


3 Theory of a Purely Capitalist Society 36
4 Stage Theory 73
5 The Historical Analysis of Capitalism 115
6 The Theory of the Capitalist Superstructure 139

PART II DIALECTICAL MATERIALISM

7 The Uno/Sekine Approach to Dialectical


Materialism 177
8 A Critical Analysis of Some Western Approaches to
Dialectical Materialism 197

PART III HISTORICAL MATERIALISM

9 Some Basic Concepts of Historical Materialism 225


10 Transition to Socialism 244
11 Conclusion 269

Notes 275
Bibliography 291
Index 296

V
Preface
Before he died in 1977, Kozo Uno expressed the wish that his
theories should not remain entrapped within the insularity of
Japan. This book in a way represents the fulfilment of that wish.
It is the first book based on the ideas of Uno to be written by a
non-Japanese. I did not have the honour of meeting Professor
Uno before he died, but if he were alive I would hope that he
would be pleased with this book.
The sub-plot of this book is East meets West. I have used my
extensive knowledge of Western Marxism in order to develop
Uno's ideas in the direction of the most important controversies
in the Western tradition. I hope the result is a cross-fertilization
which will strengthen the Marxian traditions in both the East and
the West. In the past the language barrier has been a serious
obstacle in the way of mutually stimulating exchanges. Perhaps
this book will serve to encourage future dialogue between
Japanese and Western Marxists.
In some ways it is most appropriate that Uno's ideas should
first take root in Canada. The location of Canada as a Pacific rim
country places Japan on its horizon. Further, Canadian Marxists
maintain a certain distance from British, French and American
Marxists while being exposed to their theories and debates. I feel
that intellectually and geographically I am located in a position to
encourage a critical confrontation of ideas from these somewhat
diverse traditions of Marxist thought.
Of course, the main reason why Uno's ideas have taken root in
Canada is because of the presence of his student Thomas Sekine
at York University. Sekine's Dialectic of Capital is the primary
inspiration for this book, and lowe him an immense debt for
many of its ideas. We have worked closely together for the past
eight years at York University.
Since this book has been about four years in preparation, I am
indebted to many people for the development of my ideas along
the way. The Uno study group consisting of Sekine, Stropple,
vii
viii Preface

Duncan, Bell, Weinstein, Maclean, Smardon and Maruyama has


been continually stimulating in our exploration of all areas of
Marxist theory. I have also received helpful comments on parts of
the manuscript from Professors Chastain and Cunningham and
from P. Hebert, J. Drydek and W. Secombe.
I am deeply indebted to Professor S. Mawatari for arranging a
speaking/study tour of Japan. While there I met with Uno
scholars at eight different universities. The comments of Profes-
sors Itoh, Nagatani, Kobayashi, Watanabe, Ouchi and Mawatari
were especially helpful. Professor Mawatari organized a seminar
at Tohoku University which discussed the entire manuscript
chapter by chapter. Needless to say this was most helpful and
special thanks are due to the graduate students who commented
on various chapters: T. Okuyama, H. Shima, B. Maclean. Y.
Tomita, K. Sasaki and J. Onishi.
Finally I am indebted to Linda Briskin for carefully editing the
entire manuscript, for clarifying discussions of many points, and
for sharing the pains and joys of such an undertaking as this
book.

Department of Political Science Robert Albritton


York University
1 Introduction
A theoretical system cannot be stronger than its foundations.
Althusser was the most recent Western Marxist who attempted to
give clear and consistent answers to the basic questions of Marxist
theory. He explored the scientific character of Marxist theory and
tried to specify the meaning of 'political economy', 'historical
materialism' and 'dialectical materialism'. What is the relation
between the laws of motion of capital first formulated by Marx in
Capital and the study of history? What is the epistemological
character of these laws? In the light of the answer to these
questions, in what sense is Marxian political economy a science?
Althusser did attempt to answer these questions and in doing so
hoped to give Marxist theory a firm foundation. In the early
1970s Althusser's paradigm was influential and perhaps even
hegemonic amongst Western Marxists, but its inability to deal
successfully with a number of basic problems eventually led to its
demise. Since its decline, no alternative has sparked wide interest;
indeed I am not even aware of any attempts since Althusser to
deal with the foundations of Marxist theory in anything like his
scope and thoroughness. This book is an effort to begin to fill this
vacuum. It is my belief that the work of the Japanese political
economist Kozo Uno provides a framework for successfully
solving many of the difficulties that cannot be solved within the
Althusserian paradigm. 1
Kozo Uno (1897-1977) is undoubtedly the most important
and original Japanese contributor to Marxian political economy.
His Principles of Political Economy was published in two volumes
in 1950 and 1952. The New Principles was a condensed and
revised version first published in 1964 and now available as Uno's
only work translated into English. 2 Uno wrote books dealing with
many areas of Marxian political economy, but his reconstruction
of Marx's Capital in his Principles of Political Economy is
considered his greatest contribution. In Japan Uno's work is
widely known and read, and the influence of his writings has been
1
2 Introduction

sufficiently strong to result in the creation of a Uno School of


Political Economy. Today it is one of the largest and most
significant schools of Marxian political economy in Japan. 3
Though the Uno School has many professors at leading
Japanese universities, it appears to have 'lost momentum' in
recent years. 4 Though there are many reasons for this, the reason
that I want to emphasize is a certain tendency towards scholasti-
cism and intellectual conservatism. A very large portion of the
combined energy of the Japanese Uno School has focused
primarily on the most abstract level of political economy, what
Uno called 'the theory of a purely capitalist society'. Thus instead
of developing the mediations between the inner logic of capital
and historical analysis, they have by and large generated over-
refined debates on value-form theory or some other special area
of the theory of a purely capitalist society. And instead of
developing the epistemological foundations of Uno's framework
in order to develop it as a general paradigm, they have focused
too much on interpreting Uno's texts. As a result, Unoists who
have engaged in more empirical levels of analysis often produce
work that is indistinguishable methodologically from Marxists
working within non-Unoist paradigms. In short, the power and
distinctiveness of Uno's framework as a general paradigm of
Marxist theory has not been sufficiently worked out in opposition
to other paradigms. This book represents the first steps in
overcoming these defects.
The translation of Uno's Principles into English has sparked a
growing interest amongst Western Marxists, but this interest has
also focused primarily on economic theory. 5 The result is a failure
to understand fully the power of Uno's reformulation of Marx's
law of value and a tendency to view his contribution as narrowly
economic and not as what it potentially is - a complete paradigm.
My desire then is to present Uno's approach as a complete
paradigm which gives clear and consistent answers to all the
fundamental issues'OfMarxist theory, and offers guidelines for all
areas of Marxian social science. Such an undertaking is perhaps
too much for one individual in this age of specialization. I cannot
be an expert in all areas of Marxian social science and cannot do
justice to the body of literature that exists in each area. To deal
with this problem, I want to distinguish clearly between the
general principles which inform the Uno approach and the
particular application that I work out in each area. What is most
Introduction 3

important to me is the general principles themselves, and not my


particular application which may in some cases be inadequate
because of my lack of expertise in a particular area of research.
But even where my contribution may seem rather thin in relation
to the rich body of literature that exists in a particular area, I feel
it is important for me to indicate a way of applying the general
principles that I have extracted from Uno's approach. Then at
least an indication of how to proceed will be articulated for others
to either reject or improve upon.
My knowledge of Uno's theory comes not from being able to
read Japanese, but from working closely with his student Thomas
Sekine for the past eight years. Since I do not have direct access to
the voluminous literature produced by the Japanese Uno School,
I only know Uno through Sekine. It would be presumptuous of
me to speak of 'the Uno approach' as if I was trying to represent
the entire Japanese Uno School. I shall therefore speak of 'the
UnojSekine approach', not suggesting thereby that there are not
many other important contributors to Uno theory, but only that
for me it is through Sekine that I understand Uno theory.
Further, I do not mean to suggest by the phrase 'the UnojSekine
approach' that Sekine is Uno's equal in creating the approach.
However, having visited Japan and spoken with many Uno
scholars, I do think that Sekine's contributions are major even
though the Japanese themselves are not generally familiar with
them. In my view Sekine's most important contribution is his
effort to clarify epistemological issues with the aim of developing
Uno theory in the direction of a complete paradigm. Sekine has
devoted himself to the most basic issues of Marxian economics
which in the case of the Uno School means 'the theory of a purely
capitalist society' and the epistemology implicit in it. 6 His
monumental Dialectic of Capital improves upon Uno's pure
theory by making its dialectical logic explicit, by using the latest
mathematical techniques, and by engaging with some of the best
economists in both the bourgeois and Marxian traditions.
Using the phrase 'the UnojSekine approach', then, is meant to
imply two things: first, that it is through Sekine that I know Uno,
and second, that I think Sekine has made important contributions
to Uno theory. The Uno School is already divided into distinct
tendencies or sub-schools, and I do not want to contribute to a
further splintering by declaring a Uno-Sekine faction. Instead I
claim that Sekine has opened debate on very fundamental issues
4 Introduction

which could serve to demonstrate that what Unoists have in


common is more fundamental than the issues that divide them.
My purpose will be to present the basic principles and concepts
ofthe Uno/Sekine approach, and then to develop its implications
by critically analysing the work of various theorists in the
tradition of Western Marxism. I shall be particularly interested in
the most crucial, problematic and unresolved debates, because it
is especially with these controversies that I can show the
contributions that their approach can make to Western Marxism.
Though in my view the Uno/Sekine approach represents a major
advance in developing the scientificity of Marxist theory, it leaves
many problems unresolved. Most ofthe work available in English
deals with Marxian economics and especially with pure capital-
ism, but this work has profound implications for dialectical
materialism, historical materialism and Marxist theory generally.
As I move away from pure theory to stage theory and historical
analysis, as I move from the base to the superstructure, and as I
move from capitalism to non-capitalist modes of production, the
Uno/Sekine approach is less and less well worked out, so that my
analysis becomes both innovative and tentative. I do not view the
Uno/Sekine approach as a completed doctrine with definitive
conclusions, but rather as a new approach with great promise.
The aim of this book is to present this promise not by a focus on
one area of Marxist theory but by making brief but sharp forays
into many areas of Marxist theory. This will result in short
critiques of many thinkers in the tradition of Western Marxism. If
at times my condensed characterizations of various thinkers do
not do justice to the subtlety and profundity of their thought, it is
not because I wish to be dismissive, but is rather a requirement of
a book that is as synthetic and condensed as this one. While
realizing that nearly every chapter in this book could itself be
expanded into a book, it is my hope that in simplifying I do not
distort too much.
Though Uno grounds his approach in a substantive theory, still
Uno theory is in my view primarily a framework or methodology
which can absorb any positive contribution to our knowledge of
society and history. In this sense I believe that it is a theory which
can unify Marxian social science. From the point of view of the
Uno/Sekine approach many divisions in the history of Marxist
theory are unnecessary. For example, in Western Marxism there
has been a sharp division between those who emphasize the
Introduction 5

scientificity of Marxist theory and those who see it as a


perspective of radical criticism. But Marxism must be both a
science and a radical/critical ideology, and it is precisely the
complementarity between these two aspects that is one of the
great strengths of Marxism. This book primarily explores
Marxism as science without implying for a moment that the
moral/critical side is not important. Towards the end of the book
I attempt to give some indications of how the scientific and moral
sides fit together while leaving it to others to develop Marxism as
an ethics offreedom, as a humanism, as a radical/critical ideology
and as a transformative practice.
The structure of this book follows the logic of the Uno/Sekine
approach. Since they view political economy as the foundation of
Marxist theory, this is my starting-point and the major focus of
the book. Dialectical materialism which is the basic epistemology
of political economy comes next, and the book ends with a short
section dealing with historical materialism. This final section is
the most tentative and least well developed.
Sometimes 'political economy' is used loosely to refer to
Marxian social science in general, but I want to use it to refer
specifically to the theory of capitalism. According to Uno and
Sekine the theory of capital is divided into three distinct levels of
analysis: the theory of a purely capitalist society, stage theory and
historical analysis. Part I of the book starts with a chapter which
focuses on the relation of the logical and historical in Marx's
Capital in order to show that the three levels of analysis are
consistent with what Marx was trying to achieve. The next three
chapters deal with the three levels of analysis, and the final
chapter of Part I deals with how the theory of the capitalist
superstructure is derived and developed in relation to the three
levels of analysis. Part II on 'Dialectical Materialism' has two
chapters: one dealing with the approach of Uno and Sekine and
the other a critical analysis of various other approaches. Finally
Part III on 'Historical Materialism' deals briefly with the relation
between the dialectic of capital and historical materialism, with
some basic concepts of historical materialism, with the relation
between theory and practice and with the transition away from
capitalism.
Part I
Political Economy
2 The UnojSekine
Approach and Marx
The purpose of this chapter is to introduce some of the basic
conceptions of the Uno/Sekine approach through a critical
analysis of some texts by Marx and Engels. Central to the
approach of Uno and Sekine is a conceptualization ofthe relation
between the law of value and history, or, in other words, between
the logical and historical in the theory of capital. I shall therefore
focus primarily on Marx's inadequate resolution of this issue and
on its resolution through the levels of analysis approach de-
veloped by Uno and Sekine. I also hope to show that the levels of
analysis approach makes the best sense of Marx and that the
critique developed by Uno and Sekine is an immanent critique.
Finally this chapter is an introductory chapter because although
it focuses primarily on the relation between the logical and
historical, this is in my view what is fundamentally at issue
throughout the entire history of Marxist theory. This will
therefore constitute the basic thread running through this entire
book. In this chapter the focus will be soft rather than sharp. This
will facilitate making the chapter more introductory by enabling
me to introduce a number of basic conceptions that are peripheral
to the main focus of the chapter but that will be more fully
developed in later chapters.
Marx saw Capital as his most important and most scientific
work, and yet its scientificity and its centrality to Marxian social
science has been disputed. In recent years the law of value, which
is the core of Capital, has been rejected by many Marxists, and
this attack on the scientificity of the theory has lent support to
those who challenge the centrality of Capital to Marxian social
science. I Those who celebrate the demise of the theory of value
often do so because they see it as a major source of economic
determinism, reductionism and dogmatism, which, it is generally
agreed, have retarded Marxist theory and practice. 2 The levels of
9
10 Political Economy

analysis approach to political economy developed by Uno has


radical implications for the entire tradition of Marxist theory.
The approach of Uno establishes the scientificity and centrality of
the law of value much more firmly than did Marx himself while
avoiding the pitfalls of economism. My entire book will expand
upon how this is possible, but this chapter will briefly introduce
the levels of analysis approach by explaining what it is in relation
to Marx's texts.
According to Uno and Sekine, Marx's Capital contains three
levels of analysis: the theory of a purely capitalist society,
elements of a theory of the liberal stage of capitalism and analysis
of capitalist history. Though Capital primarily contains a theory
of a purely capitalist society, lacking any conception of levels of
analysis, Marx occasionally mixes them. This weakens his aim
which in the first instance is a rigorous statement of the law of
value or 'laws of motion of capitalism'. Besides weakening the
conceptualization of the law of value, this unconscious mixing of
levels of analysis leaves the relation between the law of value and
history indefinite and unclear. Since Marx left this relationship
theoretically unspecified, other thinkers who followed in his wake
have filled the theoretical silence with debate, confusion and
inadequate resolutions to the problem. I contend that the levels of
analysis approach developed by Uno and Sekine not only offers
the strongest interpretation of the law of value, but also the most
theoretically sound approach to the relation between the law of
value and history.

1 THREE LEVELS OF ANALYSIS

According to Uno and Sekine our theorization of capitalism


divides into three levels of analysis: the theory of a purely
capitalist society, the theory of the mercantilist, liberal and
imperialist stages, and the analysis of history. Let me start, then,
with the theory of a purely capitalist society where the com-
modity-form comes totally to dominate socioeconomic life.
The commodity-form first develops historically in the external
trade between communities; hence, from the point of view of
community life it is an alien form. In pre-capitalist economies the
commodity-form was generally peripheral to socioeconomic life,
and to the extent that it did from time to time penetrate society, it
The Uno/Sekine Approach and Marx 11

tended to undermine or even dissolve the social order. Capitalism


represents a radically new world-historic economy because with
capitalism the commodity-form seizes control of production itself
and attempts to regulate all of economic life by the 'com-
modity-economic principle'.3 If the commodification of econ-
omic life were ever complete, society would be governed by a self-
regulating market; and though this point is never reached in
history, there is sufficient tendency in this direction for us to
arrive at the idea of a purely capitalist society by allowing this
historical process to complete itself in theory.
The spread of the commodity-form develops over centuries,
but absolutely crucial and central for the development of
capitalism is the commodification oflabour-power, because, with
this occurrence, the commodity-form has located its source of
profit within a production process controlled by itself. This gives
to capitalism a great dynamism since now that its source of self-
expansion is internal, it can penetrate pre-capitalist economies
and transform them together with itself into an economy that is
more and more capitalist in a world that is also becoming more
capitalist. The limit would be a global society in which all
production is the production of commodities by commodified
labour-power as regulated by the self-regulating market. This is
what Uno cans 'a purely capitalist society'.
A purely market-governed society is a reified society in the
sense that the human subject becomes determined by the
independent movements of commodities, money and capital.
Marx frequently refers to this reification throughout the three
volumes of Capital, as when he writes: 'production relations are
converted into entities and rendered independent in relation to
the agents of production',4 or 'value as capital acquires indepen-
dent existence, which it maintains and accentuates through its
movement'.5 In the theory of a purely capitalist society Uno and
Sekine allow this reification to become total, so that by letting
capital have its own way at the level of theory, they entrap it into
exposing itself for what it really is. It is reification that enables
them to theorize the laws of motion of capitalism in the abstract
and in general as distinct from all the concrete contingencies of
their actual operation in Britain in 1859 or Germany in 1900. The
self-purifying and self-abstracting tendencies inherent in reifica-
tion mean that they can theorize the laws of motion of capitalism
as laws working with 'iron necessity'.6 Total reification achieves a
12 Political Economy

level of abstraction that sheds all contingencies associated with


the historical concrete so that capital can be theorized as having
an inner logic of necessary relations. It is reification that enables
them to treat 'the characters who appear on the economic stage'
as 'personifications of the economic relations that exist between
them,.7
But if reification is total at the level of pure theory, and if the
law of value works with iron necessity at this level, how does Uno
relate the law of value to history where class struggle and all sorts
of contingent phenomena must deflect and alter the workings of
the law of value? What happens when reification is not total as it
never is at the level of history, and as a result, characters on the
economic stage actively intervene in economic relations as
opposed to being mere personifications of them? As E. P.
Thompson has argued:

no worker known to historians ever had surplus value taken


out of his hide without finding some way of fighting back ...
by his fighting back the tendencies were diverted and the 'forms
of development' were themselves developed in unexpected
ways.8

Some theorists have attempted to overcome this antimony


between necessity at the level of theory and contingency at the
level of history by placing contingency and class struggle within
the law of value itself. But this is self-defeating because the law-
like character of the law of value is bound to be undermined by
such a move. The solution to the problem is not to mix these two
levels of analysis, but to develop a third level of analysis that can
mediate the two. We can then maintain the necessity of the law of
value at the level of pure capitalism while taking account of
agency and contingency at the level of history. Uno refers to this
mediating level of analysis as stage theory. Stage theory is a
meeting-ground for the law of value and concrete history and it
results in theorizing the dominant form of capital accumulation
and accompanying political and ideological forms for the stages
of mercantilism, liberalism and imperialism. 9
The commodity-form has two aspects, value and use-value.
The production of use-values is universal to all societies, but the
generalized subsumption of use-value production to the motion
of value is only characteristic of capitalism where the commodity-
form tends to become universal.
The Uno/Sekine Approach and Marx 13

At the level of pure capitalism the motion of value is allowed to


overcome all use-value obstacles including the special use-value
labour-power. That is, the reifying force of capital securely
commodifies labour-power with the implication that class strug-
gle is temporarily quieted at this level of theory (the working-class
and capital are simply personifications of economic categories).
This produces a clear and precise understanding of how capital
secures the commodification of labour-power, the centrality of
this commodification, the tenuousness of this commodification,
the precise relation between capital and labour, and why class
struggle is likely to occur and at what points. With this knowledge
firmly established at the level of pure capitalism, it can be used to
orient stage theory where use-value production and the motion of
value in subsuming it are concretized in the form of modes of
accumulation dominant in different stages of capitalist develop-
ment.
The following example will illustrate the relation between the
three levels of analysis. At the level of pure theory we grasp the
abstract tendency for capital to concentrate and centralize; at the
level of stage theory we can understand the main dynamics of the
very rapid centralization of capital that occurred in the last
quarter of the nineteenth century (i.e. in the stage of imperialism),
and at the level of historical analysis we can understand how
Rockefeller achieved control of the oil industry in the United
States. Clearly this last level of analysis cannot be deduced from
the first, but rather pure theory and stage theory serve to guide
and inform the analysis of history. Marxists are freed from being
tossed back and forth between economism which wants to apply
the law of value directly to history and voluntarism which wants
to see everything in terms of class struggle, power and subjective
will. We can overcome these equal and opposite errors by
developing three levels of analysis which mediate the objectivity
of pure theory and the subjectivity and spontaneity of history.
Since in a purely capitalist society socioeconomic life is
completely governed by the self-regulating market, the political
and ideological superstructures can only be conceived of as
passive forms that do not interfere with the self-regulation of the
law of value. At the level of pure capitalism it is therefore accurate
to say that the superstructure is a passive reflection of the base,
and for this reason we can only theorize the basic superstructural
forms (as opposed to content) at this level of theory. The
materiality of the state and ideology as real social forces are
14 Political Economy

theorized at the level of stage theory and historical theory. At


these latter levels of analysis the superstructure may play an active
and interventionist role up to and including the nullification of
the law of value altogether. Thus the conception 'base and
superstructure' is only completely realized at the level of pure
theory, since even at the level of stage theory the economic base
cannot do without the support of the state and ideology, and at
the level of historical analysis this support is always extensive.
The closer a particular economy comes to pure capitalism, the less
it needs the active support ofthe state and ideology and the more
possible it becomes to realize a policy of 'laissez-faire'. The fact
that no historical economy ever comes very close to total laissez-
faire only goes to show that in reality use-values are not so docile
or easily subsumable to the motion of value. A firm grasp of this
point helps to clarify the great distance between pure theory and
historical theory, so that the reductionism of looking for the law
of value directly in historical theory is avoided.
The purity of the theory of a purely capitalist society means
that social relations have become objectified, and this makes it
possible to theorize economic relations as necessary relations. It is
primarily Sekine who has made explicit the dialectical logic
embedded in Marx's Capital and Uno's Principles, and who has
worked out the very close parallel between Hegel's Logic and the
theory of a purely capitalist society. to Sekine shows that pure
theory has a necessary beginning and necessary unfolding of
categories generated from the basic contradiction between value
and use-value. Being self-conscious about the dialectical logic of
pure theory, Sekine is able to make pure theory more rigorous
and at the same time offer a resolution to the debate over the
nature of dialectical materialism. Sekine argues that dialectics is a
method of arriving at objective knowledge, and the fact that it is
possible to construct a rigorous dialectic of capital has great
import for objectively grounding Marxian social science. 11
Though the dialectic of capital and levels of analysis pertain
only to capitalism, the theory of a purely capitalist society serves
to ground and to help interpret the hypotheses, maxims and
concepts of historical materialism. Thus for example 'class',
which has a clear, precise and objective meaning in a purely
capitalist society, is not always clear at the level of capitalist
history, and can be yet less determinant in pre-capitalist social
formations. The pure theory can serve as a guide in sorting
through this complexity to ,make the best sense we can of
historical reality. 12
The UnoJSekine Approach and Marx 15

Having presented this very brief outline of the UnoJSekine


approach, I shall proceed to engage with Marx and Engels on the
basic question of the relation between the logical and the
historical.

2 THE LOGICAL-HISTORICAL METHOD

Sometimes the method used by Marx in Capital has been called


the 'logical-historical method' as if a hyphen would allow us to
slide easily from the theoretical to the historical and back. 13
Unfortunately, as we shall see, this hyphenated expression is only
a verbal solution to a very real problem, a solution that lulls us
into feeling at ease precisely where we should sharply and
intensely focus our analytic and critical powers.
An important textual source of the 'logical-historical method'
is Engels's review of Marx's A Contribution to the Critique of
Political Economy written in 1859. After discussing some of the
problems with presenting political economy as a history, Engels
writes:

The logical method of approach was therefore the only suitable


one. This, however, is indeed nothing but the historical
method, only stripped of the historical form and of interfering
contingencies. The point where this history begins must also be
the starting point of the train of thought, and its further
progress will be simply the reflection, in abstract and
theoretically consistent form, of the course of history, a
corrected reflection, but corrected in accordance with laws
provided by the actual course of history, since each moment
can be examined at the stage of development where it reaches
its full maturity, its classical form.14

We see that with this method, logical development need by no


means be confined to the purely abstract sphere. On the
contrary, it requires historical illustration and continuous
contact with reality. IS

These passages have been approvingly quoted by various Marx-


ian economists as if they were definitive, requiring little else to be
said on the matter; but unfortunately the relation between the
logical and historical is one of the knottier problems in the entire
16 Political Economy

tradition of Marxism. Engels is claiming 'the logical method is


nothing but the historical method ... stripped of the historical
form and of interfering contingencies'. But this is a highly cryptic
statement, that I can neither accept nor reject without some
unpacking. Is the law of value simply an abstracted history
following the historical development of capitalism? If so, why
does the theory start with the commodity-form and end with
interest? And if it is an abstracted history, how do we do the
abstracting or in other words how do we distinguish the needed
abstractions from the 'interfering contingencies'? Furthermore,
though clarifying the logical development with historical illustra-
tions may be non-controversial, what other kinds of 'continuous
contact with reality' are called for? How can we maintain this
'continuous contact with reality' without having contingencies
interfere with our abstract logic? Finally how can we reconcile the
logical-historical method, as outlined here by Engels, with
Marx's explicit arguments in the Introduction to The Grundrisse
to the effect that the sequence of categories in the theory of capital
does not follow a historical sequence? To shed more light on these
issues let me tum to The Grundrisse.

3 THE LOGICAL AND HISTORICAL IN


THE GRUNDRISSE

In The Grundrisse Marx explicitly rejects the sort of logical-his-


torical method implied by the previous quotes from Engels. Marx
argues that the correct method of political economy is to move
from the most abstract categories to the more concrete categories.
And in this instance by 'concrete' he does not mean the real or
empirical concrete, but rather the synthetic concrete or concrete-
in-thought which 'is concrete because it is the concentration of
many determinations, hence unity of the diverse'. 16 Thus, for
example, with the theory of a purely capitalist society, we start
with the commodity-form and the opposition between value and
use-value as the most abstract categories, and we move to ever
more concrete categories. The money-form is more concrete than
the commodity-form, and the capital-form is more concrete than
the money-form. The sequence of categories 'commodity',
'money', and 'capital' moves from the abstract to the concrete.
Marx is careful to differentiate his position from Hegel's which
The Uno/Sekine Approach and Marx 17

conceives 'the real as the product of thought concentrating itself


. . . whereas the method of rising from the abstract to the
concrete is only the way in which thought appropriates the
concrete. .. . But this is by no means the process by which the
concrete itself comes into being.'17 The concrete-in-thought is
simply the way the mind appropriates the real concrete which
'retains its autonomous existence outside the head'. IS
Since the real concrete has a separate existence from the
concrete-in-thought, the sequence of categories in political econ-
omy does not have to correspond to the sequence of history. In
the theory of political economy 'money' is a more abstract and
simple category than 'cooperation', and though money appears
early in history, there have been societies in Peru and elsewhere
that developed cooperative labour processes and yet did not
develop money. 19 Thus we see cases where the theoretically more
concrete category exists historically before the more abstract.
Furthermore, money reaches its full development only in the
generalized commodity production of modern bourgeois society,
so that according to Marx, 'this very simple category, then, makes
a historic appearance in its full intensity only in the most
developed conditions of society' .20 Though money may 'exist' in
an embryonic form very early in history, it only becomes a fully
developed economic form in modern capitalism.
An even clearer illustration is the category 'labour'. Men and
women have always laboured, so that historically this would have
to be the first category of a political economy that followed the
sequence of history; and yet it was only Adam Smith who first
formulated the notion of labour in general as wealth-creating
activity in general. This is because the notion oflabour-as-such or
abstract labour could only arise in modern bourgeois society with
its very advanced division of labour and commodization of
labour-power. As Marx puts it:

Indifference towards any specific kind of labour presupposes a


very developed totality of real kinds of labour, of which no
single one is any longer predominant. As a rule, the most
general abstractions arise only in the midst of the richest
possible concrete development, where one thing appears as
common to many, to all. Then it ceases to be thinkable in a
particular form alone. On the other side, this abstraction of
labour as such is not merely the mental product of a concrete
18 Political Economy

totality of labours. Indifference towards specific labours


corresponds to a form of society in which individuals can with
ease transfer from one labour to another, and where the specific
kind is a matter of chance for them, hence of indifference. Not
only the category labour, but labour in reality has here become
the means of creating wealth in general, and has ceased to be
organically linked with particular individuals in any specific
form. 21 ['Concrete' in this quote is being used in the sense 'real
concrete' and not 'synthetic concrete'.]

Labour may be as old as humanity itself, but the concept of


'abstract labour' is a modem concept which requires the actual
development of a labour-market and 'indifference towards
specific labours'. Although labour-as-such is an abstract
category, it is also a historically specific category in the sense
that it is a product of definite historical relations and it possesses
its 'full validity only for and within these relations'.22 We can
conclude from this that the economic categories of Marx's
Capital are historical categories in the specific sense that they
presuppose the historical existence of capitalism and in the sense
that they remain valid only within this historically specific mode
of production.
Of course, this historical specificity of the theory of capital does
not mean that the theory is of no use in understanding pre-
capitalist modes of production. Since 'bourgeois society is the
most develo~ed and the most complex historic organization of
production', 3 the theory of its inner organization provides
orienting concepts and guidelines for the investigation of various
pre-capitalist modes of production. But in carrying out these
investigations, we must be careful not to 'smudge over all
historical differences and see bourgeois relations in all forms of
society,.24 In this way and in this sense, the theory of the most
developed and complex organization of production can aid us in
understanding the anatomy of less complex modes of produc-
tion. 25
Marx forcefully demonstrates that the method of political
economy is in no sense an 'abstracted history'. The starting-point
of the theory is not primitive accumulation or the transition from
feudalism to capitalism, but fully developed bourgeois society.
Fully developed bourgeois society is the given, and the sequence
of categories of the theory aimed at understanding this given is
determined by the necessary inner connections of capital. If we
The Uno/Sekine Approach and Marx 19

were to take a historical approach and start with the transition


from feudalism to capitalism, then our starting-point might be
with the categories of land and ground rent. 26 But this would
violate Marx's claim that the scientifically correct approach is to
move from the abstract to the concrete. The abstract is abstract
relative to the given object of analysis - fully developed bourgeois
society, and'. . . ca~ital is the all-dominating economic power of
bourgeois society,.2 In Marx's view our theoretical object must
therefore be capital. We must begin the theory with the most
simple and abstract determinant of capital, the commodity; and
not with some category suggested by the history leading up to
capitalism. Marx is clear and unequivocal on this point:

It would therefore be unfeasible and wrong to let the economic


categories follow one another in the same sequence as that in
which they were historically decisive. Their sequence is deter-
mined, rather, by the relation to one another in modem
bourgeois society, which is precisely the opposite of that which
seems to be their natural order or which corresponds to
historical developments. 28

This sequence of categories, then, is determined by their inner


connections within capitalist society and not by any sequence of
historical development. The theory of political economy is
essentially the theory of capital, and this theory is not genetic. The
theory does not aim at explaining the origins of capitalism,
instead the starting-point or the given is fully developed capital-
ism. 29
Let me summarize the position I have reached. There is a
determinant relation between theory and history in Marxian
political economy. Nevertheless it is inaccurate to claim that the
theory of capital is an abstracted history or that the sequence of
categories follows history. The categories of the theory of capital
are historical in the sense that they presuppose the historical
development of capitalism and in the sense that they theorize a
historically specific mode of production. The sequence of
categories is determined by the necessary inner connections of
capitalism, but the theory as a whole is useful in shedding light on
pre-capitalist and post-capitalist modes of production as long as
adequate attention is paid to their specific historical differences
from capitalism.
20 Political Economy

In The Grundrisse Marx continually emphasizes the basic


importance of arriving at a clear and precise concept of capital.
This is because capital is 'the all-dominating power,30 and the
inner construction of modern society'. 31 'The exact development
of the concept of capital is necessary, since it is the fundamental
concept of modern economics,just as capital itself whose abstract
reflected image is its concept is the foundation of bourgeois
society.mlt is clear that the 'exact development of the concept of
capital' is the theory of the inner workings of capitalism, and that
therefore the meaning of 'capital' cannot be encompassed in any
sort of brief definition. While keeping in mind the limitations of
any partial or brief characterization of capital, I shall turn to
Marx's Capital in order to explore its theoretical object with a
view to clarifying further the relation between the logical and
historical.

4 THE LOGICAL AND HISTORICAL IN MARX'S


CAPITAL

Reification

In Volume III of Capital Marx formulates a concise statement of


capitalism's most fundamental or characteristic features.

Capitalist production is distinguished from the outset by two


characteristic features.
First, it produces its products as commodities. The fact that
it produces commodities does not differentiate it from other
modes of production; but rather the fact that being a com-
modity is the dominant and determining characteristic of its
products. This implies, first and foremost, that the labourer
himself comes forward merely as a seller of commodities, and
thus as a free wage-labourer, so that labour appears in general
as wage-labour. In view of what has already been said, it is
superfluous to demonstrate anew that the relation between
capital and wage-labour determines the entire character of the
mode of production. The principal agents of this mode of
production itself, the capitalist and wage-labourer, are as such
merely embodiments, personifications ofcapital and wage-labour
... the entire determination of value and the regulation of the
The Uno/Sekine Approach and Marx 21

total production by value results from the above two character-


istics of the product as commodity, or of the commodity as a
capitalistically produced commodity. (emphasis added)
Furthermore, already implicit in the commodity, and even
more so in the commodity as product of capital, is the
materialisation of the social features of production and the
personification of the material foundations ofproduction, which
characterise the entire capitalist mode of production.
(emphasis added)
The second distinctive feature of the capitalist mode of
production is the production of surplus-value as the direct aim
and determining motive of production. Capital produces
essentially capital, and does so only to the extent that it
produces surplus value. 33

This passage proposes two essential features of capitalist produc-


tion: generalized commodity production and production aimed
at expanding surplus value. It seems to me that the discussion of
fetishism of commodities or reification which Marx includes
under the first characteristic feature is so important that it should
be separated out and listed as a third essential feature. I shall refer
to this 'materialization of the social features of production and
the personification of material foundations of production' as
reification. Reification refers to the process whereby the expan-
sion of value in the form of capital takes on an independent
existence such that the agents of production are simply used by
capital for its own self-expansion. The capitalist and the wage-
labourer are simply the 'ebodiments, personifications of capital
and wage-labour'. Throughout Capital Marx analyses the false
appearances that arise from reification. He penetrates the false
appearances that arise from viewing the economic categories as
standing for mere things externally related. Marx's constant
reminder that the economic categories are simply the dominant
social forms of bourgeois society is absolutely essential in
emphasizing the fact that capitalism is a historically limited mode
of production and that what has become reified can also become
unreified. In The Grundrisse Marx writes:

The reciprocal and all-sided dependence of individuals who are


indifferent to one another forms their social connection. This
social bond is expressed in exchange value. 34
22 Political Economy

The social character of activity, as well as the social form of the


product, and the share of individuals in production here appear
as something alien and objective, confronting the individuals,
not as their relation to one another, but as their subordination
to relations which subsist independently of them and which
arise out of collisions between mutually indifferent individuals.
The general exchange of activities and products, which has
become a vital condition for each individual - their mutual
interconnection - here appears as something alien to them,
autonomous, as a thing. 35

Commodity exchange is the all-pervasive socioeconomic connec-


tion between individuals, so that individuals become externally
related very much like matter in motion and the only thing that
ties them all together in mutual dependency is the motion of
value. As a result, interpersonal relations become materialized
and objectified, so much so that economic categories appear to
theorize things alone. In order to demystify this false appearance,
Marx takes great pains continually to demonstrate that the
economic categories, though objective, are in fact objectified
social relations.
The existence ofreification is what makes it possible rigorously
to theorize the motions of capital, since it is precisely reification
that enables us to speak of the dynamic of capital as self-
expanding value which prevails over and shapes social interaction
to fit the needs of capital. Capitalism is self-reifying in the sense
that it tends to spread and entrench the commodity-form as the
governing principle of socioeconomic life. Thus, for example,
labour-power becomes increasingly commodified with the de-
velopment of machine production, and at the same time labour-
power becomes more homogeneous and deskilled. Increasingly
capital can go to the labour-market and hire not this or that type
of labour, but labour as such to produce any use-value what-
soever with absolute indifference to anything but profit criteria.
But this self-reifying, self-simplifying, self-abstracting and self-
purifying tendency answers a question that I posed earlier:
namely, how do we distinguish the essential abstractions for
theorizing the law of value from the interfering contingencies?
The answer is that the self-purifying tendencies at work in
capitalist history, though never completed, develop sufficiently to
enable us to allow them to complete themselves in theory. Smith
The Uno/Sekine Approach and Marx 23

and Ricardo are able to proceed quite far in arriving at the


fundamental abstractions of political economy by being guided
by the self-abstracting tendencies of capitalism even though these
tendencies were far from maturity when they wrote. Writing 40 or
50 years after Ricardo, gives Marx a much better vantage-point
since the self-abstracting tendencies are much more developed,
and with them, an emerging socialist movement which adds to
Marx's vantage-point. Therefore the answer to our question is
that capitalism itself proceeds quite far in shedding 'interfering
contingencies'. By allowing this process to complete itself in
theory, the result is a totally reified purely capitalist society. In the
first instance, it is capitalism itself which distinguishes between
the necessary and the contingent, so that our theoretical abstrac-
tions are helped along considerably by the development of reality.

Necessity

Following Marx's usage I referred to the law of value as 'the


necessary inner connections' of capitalism. This implies that the
law of value theorizes a totality with a clear distinction between
inner and outer, and that the inner is characterized by necessary
relations as opposed to the outer. Marx uses many different
metaphorical expressions in trying to conceptualize this inner
versus outer distinction, but he never arrives at the concept of a
purely capitalist society or the concept oflevels of analysis though
he comes close in some passages. In my view the 'inner nature' of
capital that he is trying to theorize is totally reified pure
capitalism. Pure capitalism is a totality because as Marx puts it
'value as capital acquires independent existence, which it main-
tains and accentuates through its movement,.36 The theory of the
'inner essence' of capital is the theory of value; it is the theory of
how value through its own motion and without outside help can
subsume and regulate capitalist socioeconomic life. As Marx puts
it, 'capital is the self-expansion of value' without the aid of an
outside 'other,.37
In the following quote from Volume I of Capital Marx makes it
clear that value is the most abstract and universal category of
bourgeois production:

The value-form of the product of labour is not only the most


24 Political Economy

abstract, but is also the most universal form, taken by the


product in bourgeois production, and stamps that production
as a particular species of social production, and thereby gives it
its special historical character. If we treat this mode of
production as one eternally fixed by Nature for every state of
society, we necessarily overlook that which is the differentia
specifica of the value-form, and consequently of the com-
modity-form, and of its further developments, money-form,
capital form, etc. 38

This quote explains why Marx begins Capital with value-form


theory. The basic capital-form is M-C-M', but this means that
the commodity-form and the money-form must be developed
before we can understand the capital-form.
Further, since the money-form is logically derived from the
commodity-form, money being a special commodity which
becomes universal equivalent, it is clear that logically the
commodity-form must come first in value-form theory. Value-
form theory demonstrates that value must differentiate itself into
commodities and money. In order to proceed dialectically, we
must start with the most abstract category 'commodity' and then
show that a full understanding of its nature requires the category
'money', which is logically derived from the commodity, and
further, to understand fully both 'commodity' and 'money', we
must logically derive 'capital'. In this fashion the dialectic of
capital proceeds in necessary logical steps until the motion of
value has subsumed all use-value obstacles and the dialectic of a
purely capitalist society is completed. To explicate fully why the
move from 'commodity' to 'money' is a necessary move, I would
have to examine thoroughly the contradiction between value and
use-value inherent in the commodity and show why the contradic-
tion necessitates the generation of money, but this is beyond the
scope of this book, and it is done in a very complete and clear way
by Sekine in The Dialectic of Capital. 39 I shall have more to say on
the issue of necessity in subsequent chapters.

Metaphorical Expressions of the Relation between the Logical and


Historical

As I have already mentioned, Marx uses various metaphorical


expressions or analogies to try to explain the relation between the
The Uno/Sekine Approach and Marx 25

law of value and history, but he never produces clear and precise
theoretical concepts. The following quote from Marx's 'Results
of the Immediate Process of Production' expresses one of these
metaphors:

The more highly capitalist production is developed in a


country, the greater the demand will be for versatility in labour-
power, the more indifferent the worker will be towards the
specific content of his work and the more fluid will be the
movements of capital from one sphere of production to the
next. Classical economics regards the versatility of labour-
power and the fluidity of capital as axiomatic, and it is right to
do so, since this is the tendency of capitalist production which
ruthlessly enforces its will despite obstacles which are in any
case largely of its own making. At all events, in order to portray
the laws ofpolitical economy in their purity we are ignoring these
sources of friction, as is the practice in mechanics where the
frictions that arise have to be dealt with in every particular
application of its general laws. 40 (emphasis added)

Marx's discussion ofthe 'versatility', 'indifference' and 'mobility'


of labour is simply using other words to talk about the
abstractness oflabour. Thus the tendencies that Marx is speaking
of only complete themselves in the theory of a purely capitalist
society where the reality and the concept 'abstract labour'
coincide. But the analogy between the laws of pure mechanics and
the laws of pure capitalism can be misleading.
The relation between the laws of mechanics and their applica-
tion and the law of value and its application is far from parallel.
The law of value is not simply like an ideal machine that in reality
always has frictions. A machine involves the interaction of rigid
parts that have definite and set motions. The law of value is like
the theory of a self-constructing machine, where it is not us who
abstract from the frictions but the machine itself in an effort to
construct itself. The fact that it never actually becomes a smooth-
running machine empirically does not prevent us from allowing it
to complete itself in theory. But then we must remember that
when we apply the law of value in a particular empirical context,
we are not simply looking for 'frictions', but rather that we are
looking at a partially deconstructed machine that is not very
machine-like at all in its operation in the sense that it cannot
operate without all sorts of outside supports, and in the sense that
26 Political Economy

it loses some of its rigidity and becomes partially protean with


unpredictable motions and motions that are altered by various
and sundry outside interferences which are themselves not
entirely predictable. The approach of Uno and Sekine would
require us to interpret the metaphor in the following way: the
theory of a purely capitalist society is like the theory of a self-
constructing machine. The theory copies the principles of the
machine's self-construction allowing the construction to com-
plete itself in theory. This self-constructing machine tries to
complete itself in history, and though it never succeeds, in
attempting to do so, it passes through stages of development
enabling us to develop a stage theory. Pure theory and stage
theory then help to orient historical/empirical studies, where the
efforts of the self-constructing machine to complete itself are
further deflected or unfulfilled because of diverse contingencies,
particularities and recalcitrant use-values.
The machine/friction metaphor could lead to an extremely
economistic use of the law of value. Because the law of value is a
purely economic theory, this metaphor would imply economic
determinism at the level of history except for local frictions. But
this is very inadequate because as Uno and Sekine point out, even
at the rather abstract level of stage theory, the state and ideology
playa significant role in supporting the law of value, and at the
level of historical analysis the political and ideological become
much more than simply oil to the frictions to the law of value.
Furthermore, contrary to Marx, it is not correct for classical
economists to regard the mobility of capital and labour as
'axiomatic', since this blinds them to the fact that the economic
relations are historically specific reified social relations. A
dialectical as opposed to an axiomatic approach sees that this
mobility is only achieved by allowing reification to become total
in theory. This problematizes the mobility of capital and oflabour
by making it clear that this mobility is not simply given. It only
partially exists in reality and only fully exists at the level of pure
theory. We then understand how this pure mobility comes about:
namely, through the theoretical extrapolation of the self-reifying
tendency of capitalism. Furthermore, we understand the need to
mediate pure theory and empirical reality where mobility is far
from complete. Finally, the abstractions in a dialectical approach
are arrived at with the aid of the self-abstracting tendencies of
reality itself whereas this is not necessarily the case with an
axiomatic approach.
The UnoJSekine Approach and Marx 27
In the following quote from Volume III of Capital, Marx uses
the 'friction' metaphor coupled with the frequently used but
vague notion of 'approximation'.

This would assume competition among labourers and equalisa-


tion through their continual migration from one sphere of
production to another. Such a general rate of surplus - viewed
as a tendency, like all other economic laws - has been assumed
by us for the sake of theoretical simplication. But in reality it is
an actual premise of the capitalist mode of production,
although it is more or less obstructed by practical frictions
causing more or less considerable local differences, such as the
settlement laws for farm-labourers in Britain. But in theory it is
assumed that the laws of capitalist production operate in their
pure form. In reality there exists only approximation; but, this
approximation is the greater, the more developed the capitalistic
mode of production and the less it is adulterated and amal-
gamated with survivals of former economic conditions. 41
(emphasis added)

Here Marx asserts that 'in theory it is assumed that the laws of
capitalist production operate in their pure form', but this could be
misleading since we do not simply 'assume' 'for the sake of
theoretical simplification', rather we let capitalism purify itself.
Now it is accurate to say that the law of value and pure capitalism
'is an actual premise of the capitalist mode of production' in the
sense that the self-containedness of the law of value indicates the
world-historic possibility of capitalism as a hegemonic economic
system. The problem is how this 'actual premise' relates to
history. Marx uses the settlement laws in Britain as an example of
a 'practical friction', 'causing more or less considerable local
differences' in the functioning of the law of value. He does not
seem to think that these 'practical frictions' are problematic
because the more developed the capitalist mode of production,
the less the divergence between the laws of pure capitalism and
empirical reality. Thus Marx seems to think that capitalism will
become more and more pure, the more it develops. But this
overemphasizes the ability of value to overcome use-value
obstacles. Uno and Sekine show that the development of
capitalism leads to the production of use-values that become
more and more difficult to subsume to the law of value. Even the
28 Political Economy

development of heavy industry requires finance-capital in order


to be capitalistically managed, but finance-capital, which in-
volves the development of monopoly and very active state
intervention must already represent a step away from the
continued self-purification of capitalism. According to Uno and
Sekine, then, it is incorrect to say that as capitalism develops it
becomes purer. It may be that it becomes less adulterated with
pre-capitalist survivals as it develops, but this is not the same
thing as becoming purer since with the stage of imperialism it is
apparent that the obstacle in the way of further purification is
generated by the development of capitalism itself in the form of
heavy industry.
This is an important point because it explains in part why Marx
would not see any need for stage theory. If capitalism in history
becomes more and more pure until a brief period of revolutionary
transition, then the tendency for capitalism asymptotically to
approach pure capitalism would dispense with any need for stage
theory. But this greatly overemphasizes the capability of the
motion of value to subdue use-value obstacles. The ramifications
of this are immense, making for a significant break between
Marx's conceptions and those of the Uno/Sekine approach.
A\Xording to Uno and Sekine, capitalism can only be historically
viable for a limited range of use-value production (or what is the
same thing a limited range of the development of productive
forces), and precisely for this reason capitalism only achieves a
partial and loose grip on history. This not only affects the way
Uno and Sekine relate the law of value to history, but also it
affects how they understand the transition away from capitalism.
What needs to be emphasized at this point in the argument is that
capitalism only becomes purer through the stage of liberalism,
and that already with the stage of imperialism, the law of value
must increasingly rely on monopolies and the state to help it
capitalistically manage heavy industry.
In a final quote from Capital Marx uses the metaphor 'ideal
average' to refer to the relationship between the law of value and
empirical history:

In our description of how production relations are converted


into entities and rendered independent in relation to the agents
of production, we leave aside the manner in which the
interrelations, due to the world-market, its conjunctures,
The Uno/Sekine Approach and Marx 29

movements of market-prices, periods of credit, industrial and


commercial cycles, alternations of prosperity and crisis, appear
to them as overwhelming natural laws that irresistibly enforce
their will over them, and confront them as blind necessity. We
leave this aside because the actual movement of competition
belongs beyond our scope, and we need present only the inner
organization of the capitalist mode of production, in its ideal
average, as it were. 42 (emphasis added)

It is clear from this that any conjunctional phenomena such as the


actual movement of credit, foreign trade, prices or boom/bust
cycles must remain beyond the scope of the theory since these
involve a host of particular contingent factors. The scope of the
theory is 'only the inner organization of the capitalist mode of
production, in its ideal average, as it were'. But the law of value is
not an 'ideal average' in the sense of an abstraction averaged from
a large number of particulars. This implies an empirical as
opposed to a dialectical approach. The concept of pure capitalism
does not come from averaging large numbers but from tracing the
self-reifying tendencies of capitalism. Thus the development of
economic theory from Smith to Ricardo to Marx achieves ever
purer and more accurate categories by grasping the self-abstract-
ing principles at work in capitalism and not by making empirical
abstractions from conjunctural particulars.

Capital and the Logical-Historical Method

Earlier in this chapter I argued that the logical-historical method,


which sees the law of value as abstracted history, is rejected by
Marx in The Grundrisse. But the logical-historical method can be
interpreted more broadly to refer to any approach which sees an
unproblematic or overly close connection between the law of
value and history. Where the relation between the law of value
and history is not clearly and precisely theorized, it is almost
natural to lapse into the logical-historical method. This is
because lacking theoretical clarity on this relation, thinkers tend
to move back and forth from the law of value to history as though
such moves are unproblematic. Marx is no exception to this
tendency.
Despite many passages in Marx's writings that seem to reject
30 Political Economy

the logical-historical method, one can find other passages that


support it, and this is because Marx himself was unclear about the
relation between the law of value and history. For example, Marx
begins Capital with the sequence 'commodity', 'money' and
'capital', and it seems that this parallels history where at first there
is commodity barter without money, then there is the use of
money to promote commodity trade, and finally there is the
development of capital as a profit-making activity. Marx even
gives examples that would support this interpretation. But when
we look at other parts of Capital or at the work as a whole we find
no such parallel, and we discover that the sequence of categories is
a sequence of dialectical logic. Capital is primarily a theory of
fully developed capitalism and of the law of value and not of the
economic life of peoples from primitive society to the present.
Marx continually gives historical examples to illustrate the law
of value, but sometimes the illustrations make it seem that there is
no distance at all between the law of value and empirical reality
but only minor frictions. Sometimes' the historical illustrations
give the impression that Marx is writing 'abstracted history' and
not a theory of the necessary inner connection of pure capitalism.
One reason that Marx included so much historical material was
that he very much wanted Capital to be as readable and accessible
as possible. Marx was also aware that a dialectical method of
presentation might appear as an 'a priori construction', and to
avoid this he wanted to tie down the inner logic of pure capitalism
to history.43 For this reason he felt compelled to include a
historical chapter on 'Primitive Accumulation' at the end of
Volume I of Capital. As Marx puts it, 'The whole movement
therefore, seems to tum in a vicious circle, out of which we can
only get by supposing a primitive accumulation.'44
Despite many efforts to understand the relation between the
logical and the historical, Marx remains vague and waivers back
and forth between a dialectical approach and the logical-his-
torical method, which as Althusser has argued may be either
Hegelian or empiricist depending upon whether the logical or
historical is accorded primacy.45 Marx saw his theoretical object
as being in some sense the inner logic, inner nature, inner essence,
inner organization or necessary inner connections of capital in
general. His aim was to present a complete theory of the law of
value, and this he more or less accomplished; but where he
remained completely vague was on the relation between the law of
The UnoJSekine Approach and Marx 31

value and history. Thus in Chapter VI of Volume III of Capital


Marx writes:

The phenomena analysed in this chapter require for their full


development the credit system and competition on the world-
market, the latter being the basis and the vital element of
capitalist production. The more definite forms of capitalist
production can only be comprehensively presented, however,
after the general nature of capital is understood. Furthermore,
they do not come within the scope of this work and belong to its
eventual continuation. 46 (emphasis added)

Unfortunately the 'eventual continuation' that Marx is here


referring to was never written. Therefore it remains unclear just
how Marx might have moved from the theory of the general
nature of capital to its more definite forms. It is precisely to this
problem that the levels of analysis approach developed by Uno
and Sekine addresses itself.
Though Marx lacked the clear and precise concepts of ' a purely
capitalist society' and 'levels of analysis', he generally avoided
mixing levels of analysis because of his single-minded focus on the
law of value. There are, however, a number of points in Capital
where he does mix levels of analysis in ways that interfere with the
conceptualization of the law of value.
Perhaps the clearest example is his discussion of the counter-
tendencies to the tendency for the rate of profit to fall. 47 I contend
that the only countertendency that needs to be discussed at the
level of pure theory is the tendency for the rate of surplus value to
rise, because this is the only countertendency that is generated by
the inherent motion of capital in a purely capitalist society. I will
not discuss all of the countertendencies that Marx mentions
because two will be enough to indicate the problem of mixing
levels of theorizing. First, Marx mentions foreign trade, but this
cannot be a countertendency because in a purely capitalist society
there are no boundaries and hence there is no distinction between
domestic trade and foreign trade. Second, Marx mentions the
'depression' of wages below the value of labour-power', but this
cannot be a countertendency to a long-run tendency like the
declining rate of profit because in general the depression of wages
below the value of labour-power can only be conjunctural. In a
purely capitalist society all exchanges are quid pro quo, so that
32 Political Economy

such an unequal exchange could only be a short-run phenomenon


occurring in the trough of a depression and counterbalanced by
wages above the value oflabour-power at the height of prosperity
just before a depression. Since in the long run wages must
approximate the value of labour in a purely capitalist society,
depression of wages cannot be considered a countertendency at
this level of theory.
Marx did not see the need for a separate level of stage theory
because he seemed to assume capitalism would purify itself until it
reached its point of demise. He died before imperialism con-
solidated itself as a distinct stage of capitalist development, and
for this reason he tended to see the early signs of monopoly
capitalism as signs of the transition to socialism. Monopoly
capitalism was not conceived of as a stage of capitalism so much
as the inauguration ofa phase of transition. About the formation
of joint-stock companies Marx writes:

It is the abolition of capital as private property within the


framework of capitalist production itself ... the stock com-
pany is a transition toward the conversion of all functions in
the reproduction process which still remain linked with capital-
ist property, into mere functions of associated producers, into
social functions .... This is the abolition of the capitalist mode
of production within the capitalist mode of production itself,
and hence a self dissolving contradiction, which prima facie
represents a mere phase of transition to a new form of
production. 48

Marx, then, saw this movement away from the self-purifying


tendency of capitalism as a movement away from capitalism
itself, rather than a move from a liberal stage to an imperialist
stage of capitalism. It is only with Lenin, writing from the
vantage-point of World War I, that it becomes possible to
conceive of imperialism as a distinct stage of capitalist develop-
ment, and therefore to intimate the need for stage theory.

Class Struggle and the Law of Value

Marx's Capital lives and breathes class struggle to such an extent


that some interpreters have gone so far as to argue that the law of
value directly expresses class struggle. But class struggle involves
The Uno/Sekine Approach and Marx 33
a political balance of forces which is conjunctural and always
changing, whereas, according to Marx, the law of value implies
that capital and labour are mere personifications of economic
categories whose motion is one of iron necessity. Since the law of
value is the inner logic of capital and class struggle is historical,
the effort to integrate the law of value directly with class struggle
tends to produce some form of the logical-historical method
which itself tends towards economism or voluntarism. As I have
already pointed out, Marx was not always clear on this issue and
there are many passages in Capital which would support a
logical- historical method. In the main though, Marx treats
capital and labour as completely reified and secured commodities
in working out the law of value, although he may use examples of
class struggle to illustrate the law of value. The reason that he
maintains total reification is because as soon as class struggle is
introduced into the law of value, contingent conjunctural
elements are introduced that undermine the necessary connec-
tions of the theory.
The one point at which class struggle seems to be crucial even to
the law of value is on the length of the working day. But in a
purely capitalist society there is no class struggle since it has been
temporarily quieted by the completion of reification. At the level
of pure theory, though we may say that the length of the working
day is at least in part determined by class struggle, the analysis of
class struggle itself is not a part of pure theory; only the result of
class struggle, namely a working day of a particular length is part
of pure theory. In other words, from the point of view of pure
theory, the length of the working day is simply given. Thus pure
theory looks at what variations in the length of the working day
mean to the law of value without going into the conjunctural
determinants of a working day of a certain length. Pure theory
can certainly take note of the fact that class struggle is likely to
play an important role in the historical determination of a
working day of a particular length, but it does not step outside its
level of analysis to carry out the historical analysis of such
struggles without being very explicit about moving from one to
another level of analysis.
In Capital Marx creates confusion and lends support to the
logical-historical method because of the lack of any conception
of levels of analysis. The move from the discussion of the law of
value to the historical analysis of class struggle is all too often
made without signalling the reader that he is moving from one
34 Political Economy

level and type of analysis to another. With the approach of Uno


and Sekine, it is clear that at the level of pure theory class struggle
plays no role whatsoever in determining the law of value, though
once we have this determinant law of value, we have an objective
reference to guide and improve our historical studies of class
struggle. Paradoxically, by allowing reification to complete itself
and thus theoretically suppressing class struggle, we benefit by
gaining a theory that can be a great aid in our studies of class
struggle.
The inadequacy of Marx's Capital when it comes to theorizing
the relation between the law of value and class struggle is one of
the most serious weaknesses of the theory. Lack of clarity on this
point has produced both confusion and controversy. How can the
law of value operate with iron necessity when it is at least partially
dependent on the contingencies of class struggle? The law of value
is the inner logic of capitalism as such and in general, but the
outcomes of class struggle are conjunctural in the sense that they
are the result of conflict between groups in a particular political
system. The ten-hour day or the eight-hour day is primarily the
result of class struggle constrained by a particular level of
development of the productive forces. Thus the ten-hour day
cannot be determined by the law of value itself. Rather the law of
value helps us to understand why, at a historical level of analysis,
it is possible for the length of the working day to be shortened and
why also it cannot 'be shortened too much. Because the under-
standing of the outcomes of class struggle is always primarily
conjunctural, it should in the main be studied at a historical level
of analysis. This does not mean that the law of value cannot serve
to inform this analysis. But to say that the law of value directly
reflects class struggle or vice versa must either undermine the
necessity of the law of value or undermine the subjective factor
that is essential to class struggle. The recent debate between
Thompson and Althusser is one example of the kind of con-
troversy generated by Marx's failure to arrive at a more
determinate conceptualization of the relation between class
struggle and the law of value. The Uno/Sekine levels of analysis
approach can in principle resolve this issue.

5 CONCLUSIONS

In this chapter I have introduced some of the basic ideas of the


The UnojSekine Approach and Marx 35

UnojSekine approach to Marxist theory and have tried to show


that these ideas offer a solution to problems around the relation
between the logical and historical with which Marx and Engels
were struggling. I have indicated that Marx was groping in the
direction of the concept of a purely capitalist society and a
dialectical method but never achieved a clear and determinant
conceptualization of the relation between the logical and the
historical. In Capital Marx uses such vague terms as 'friction',
'approximation' and 'ideal average' to discuss the relation
between the law of value and history. Also because of the way
Marx mixes in historical illustrations with the law of value, many
passages suggest a logical-historical method. But, I have argued,
the logical-historical method is incorrect because it sees too close
and direct a connection between theory and history. The law of
value is either seen as an abstracted history or capitalist history is
seen as the concretization of the law of value. The result is
weakened theory, reductionist history or both. I have in this
chapter begun to outline the way in which the UnojSekine
approach solves the problem of the relation between the logical
and historical and between the law of value and history. In what
follows of Part I, I shall develop the levels of analysis approach
and bring out its implications by critically analysing theorists in
the tradition of Western Marxism and by offering new perspec-
tives on current debates. I shall tum next to the theory of a purely
capitalist society.
3 Theory of a Purely
Capitalist Society
In the previous chapter I argued that the Uno/Sekine conceptions
of 'pure capitalism' and 'levels of analysis' represent reasonable
extensions of Marx's efforts in Capital. Because Marx's under-
standing of the relation between the law of value and history was
not well worked out, he fell back on the use of metaphors and
vague expressions and failed to achieve a determinant theoretical
conceptualization. 'The theory of a purely capitalist society' and
'levels of analysis' are determinant concepts that can solve the
problems Marx was wrestling with in a way that is most in
keeping with his aim to construct a scientifically adequate theory
of political economy. In this chapter I shall move from the focus
on the relation between the logical and historical to a focus on the
law of value itself. My main concern will be to indicate some of
the improvements that Uno and Sekine make on Marx's formula-
tion of the law of value - improvements that flow primarily from
a more determinant conceptualization of the theoretical object
and from a more rigorous dialectical approach.
In some ways this is the most difficult chapter to write, and that
is because of the richness, fullness and immense scope of the
theory that it attempts to convey. Uno and Sekine have made
their greatest contributions at the level of the theory of pure
capitalism, and one is tempted simply to refer the reader to their
writings. Uno's Principles is available in English, and the
interested reader is encouraged to read this work. However, it is
extremely condensed and really represents notes that Uno never
expanded because of declining health. The work that enlarges and
refines Uno's Principles and brings it up to date is Sekine's
monumental Dialectic of Capital. It is this work which makes the
dialectical logic ofthe theory explicit, which debates with some of
the best economic theorists both Marxist and non-Marxist and
which offers mathematical proofs where needed. I shall not try to
36
Theory of a Purely Capitalist Society 37

summarize this theory in its entirety in this chapter, but instead


shall discuss some of the differences between Uno and Sekine's
theory and Marx's Capital and shall consider some current
controversies from the point of view of the theory of pure
capitalism. My aim is to give the reader some indication of the
implications of the UnoJSekine approach by presenting very
condensed pieces of it in connection with familiar literature and
debates. The defect of this is that the theory of pure capitalism
constitutes a dialectical totality. Extracting pieces from it is
bound to do some violence to the theory by leaving out logical
steps and mediations behind certain conclusions.
Marx's three volumes of Capital contain in rough and incom-
plete form the foundations of a theory of a purely capitalist
society. At the centre of this theory is the law of value which
reveals the necessary socioeconomic relations that are attendant
upon the capitalist expansion of value. Anyone who seriously
studies Marx's Capital is bound to be impressed by the great
scope and depth of its explanatory power. I am inclined to agree
with Louis Althusser when he claims that Marx's Capital is the
founding work of sociohistorical science on the same order as the
work of Euclid for mathematical science or that of Galileo and
Newton for natural science; and yet what is peculiar about Marx's
Capital is how little attention has actually been devoted to
improving the theory and building upon it. I Not only would one
expect the founding work of a new science to have a groping and
incomplete character, but also Capital was left in a very
unfinished state (only Volume I was completed). It would be
unrealistic to expect a perfected science to spring fully formed out
of Marx's head. One would expect to find in Capital the rough-
hewn basics that others would refine, enlarge and perfect: but this
is not in general the way that successors have related to Marx's
text. Often interpreters have either defended the text as it stands
or have rejected it as it stands. Though some have reconstructed
pieces of it, few have undertaken to reconstruct the theory as a
whole with a view to clarifying and sharpening its arguments. But
this task is of pressing importance given the penchant for various
schools of Marxism to find the law of value wanting and therefore
either to abandon it or to gut it. And it is to this task of
reconstructing the whole that Uno and Sekine have directed their
considerable abilities.
According to Sekine, the idea of a purely capitalist society
38 Political Economy

presupposes an ideal environment in which the motion of value is


allowed to prevail over use-value obstacles. 2 Such a concept is
unlike a subjective analytic construct or model because in this
case thought is guided by the self-purifying tendencies inherent in
capitalism. Historically value does increasingly subsume and
neutralize use-value production, at least up until the stage of
finance-capital (roughly 1875). Though at a historical level
capital never approaches very close to pure capitalism, yet the
tendency in that direction enables us to conceptualize a purely
capitalist society where all production is production of com-
modities by means of commodified labour-power. By extending
in thought the self-purifying tendencies of capitalism, the idea of
capitalism is purged of all local particularities and contingencies
which might confuse our grasp of capitalism's inner logic. With
the concept of a purely capitalist society, it is possible to
understand the working of capitalism entirely in accord with its
own economic principles without any interference of extra-
economic force or other alien forces (either non-capitalist or non-
economic). The theory of a purely capitalist society reveals what
capitalism must be or how it must operate when it is allowed to be
most fully itself. With this knowledge of what capitalism
necessarily is, we can begin to understand actual capitalist
societies which are always impure. We can begin to distinguish
clearly the capitalist from the non-capitalist and the economic
from the non-economic, and thus we can grasp the degree to
which particular societies are capitalist and how they operate in
the light of various 'impurities' which interfere with the motions
of capital.
The previous chapter demonstrated that Marx's Capital is only
possible because capital is self-purifying. Economic categories
such as 'value' and 'abstract labour' would be subjective and
formal unless capital had some tendency to make itself more
homogeneous and pure. If capital did not have an inner coherence
resulting from the tendency towards a self-regulating market and
was continually and primarily determined by external forces, no
such theory as contained in Marx's Capital could be written. If the
motions of capital were determined at every moment primarily by
political policies or some other contingent set of influences, then
surely there could be no sense to 'laws of motion of capital'. And
since at a historical level this is to some extent true, the only
rigorous theory of capital that can be written is a theory of a
Theory of a Purely Capitalist Society 39

purely capitalist society. Uno and Sekine make explicit this


concept which is only implicit in Marx's Capital.
We can only clarify what capitalism really is by allowing it in
our minds to be totally victorious over its social-historical
environment. We know, however, that in reality its victory is never
more than partial, and even this partial victory requires allies (e.g.
the state and ideology). Use-values in reality are never so docile as
we must assume in the pure theory. For example, labour-power
always resists being commodified, resulting in class struggle. The
effort totally to commodify nature also creates severe problems
for capitalism and treating money as a pure commodity to be
regulated only by the market seems often to contradict the needs
of real economic life. These problems and others at the level of
concrete history require that capital receive the support of state
policies. The fact that use-values are not so docile at the level of
empirical history necessitates levels of analysis where we move
from pure theory, where use-value obstacles are neutralized, to
stage theory, where the constraints of dominant forms of use-
value production give rise to a dominant form of capital
accumulation and accompanying state policies, and finally to
historical theory, where use-value obstacles have to be considered
in their specificity. As we move towards the historical concrete,
necessity becomes increasingly constrained and interfered with by
contingency.

1 THE DIALECTIC OF CAPITAL

Marx was neither explicit not systematic in developing the


dialectical logic embedded in the law of value; and yet, following
Sekine, I shall argue that this is the key to understanding the
epistemology of the law of value and to understanding the precise
meaning of the 'theory of the necessary inner connections of the
capitalist mode of production'. Once we become fully self-
conscious of the dialectical logic of the theory of a purely
capitalist society, we can state the theory in a much more rigorous
fashion than did Marx.
Western Marxists have not made a great deal of headway in
discovering the dialectical logic embedded in the law of value. In
The Making of Marx's 'Capital' Rosdolsky brings to our
attention some of the dialectical qualities of Marx's theory of
40 Political Economy

value, but this is mostly because in arriving at an interpretation of


Capital, he relies heavily upon The Grundrisse, where dialectical
modes of expression are more on the surface. 3 Some essays in the
collection edited by Diane Elson attempt to deal with the
dialectical logic of the law of value but only with limited success. 4
David Levine, in Economic Theory Volume I, brings out some
aspects of dialectics but falls far short of reconstructing the law of
value as a whole as a rigorous dialectic. 5 Perhaps the dearth of
dialectical readings of Capital stems in part from the predomin-
ance of positivist and empiricist approaches to social science in
the West, whereas in Japan Marxian economics was established
as the predominant academic discipline of economic theory when
Japanese universities were first developing in the 1920s. For this
reason it was easier for Japanese Marxists to explore the logic of
the theory of capital without being diverted by a hegemonic
positivist tradition. 6 It is not surprising then that Japanese
Marxists are the first to reconstruct the theory of value as a whole
as a dialectical logic.
Sekine has demonstrated the very close parallel between
Hegel's Logic and the dialectic of capital. Just as the basic
contradiction in the Logic is between 'Being' and 'Nothing', so
the basic contradiction of the dialectic of capital is between value
and use-value. The Logic is divided into the Doctrines of Being,
Essence and Notion and parallel to this the dialectic of capital is
divided into the Doctrines of Circulation, Production and
Distribution. Furthermore, the logical structure of each of these
doctrines parallels the logical structure of the corresponding
doctrine in Hegel's Logic. More will be said about this parallel in
Chapter 7, but suffice it to say now that the theory of a purely
capitalist society does have a dialecticallogic. 7
The reason that the theory of a purely capitalist society can
have a dialectical logic is that it is a theory of a self-determined
totality. The logic of that self-determination can fully express
itself at the level of pure theory. By allowing reification to
complete itself in theory, the tendency for commodity-economic
logic to discard all extra-economic contingencies is completed.
This means that the personal and interpersonal become objec-
tified by the operations of the self-regulating market, and social
life becomes essentially objectified economic life. A purely
capitalist society is essentially a purely economic society. Whereas
in Hegel's philosophy the concepts are made pure and free from
Theory of a Purely Capitalist Society 41

the contingencies of everyday imagistic discourse by a philoso-


phic abstraction which finally rests upon the assumption that the
inner logic of the mind corresponds to the inner logic of the
universe, in the case of the materialist dialectic of capital, the
effort to arrive at pure concepts free from contingency is aided by
the self-abstracting tendencies of capitalist reality itself.
The sequence of categories in a dialectical logic has a necessary
beginlling, a necessary unfolding and a necessary completion
determined by the logic of the totality being theorized. The
beginning must be the most abstract, empty and unspecified
category of the totality being theorized. This initial emptiness is
then filled in by a dialectical contradiction which moves by
necessary steps to overcome this initial emptiness until the
theoretical object is filled out, completely synthesized or becomes
'concrete' .
Let me illustrate the dialectic of capital by briefly outlining its
first few steps. The starting-point of the dialectic of capital is the
commodity with its basic contradiction between value and use-
value. Sekine argues that 'this contradiction reflects the fact that
the commodity-economic principles that bring capitalist society
together are alien to the material aspect of its economic life which
is common to all societies'. 8 The value of the commodity can only
free itself from the particularity of its own use-value by suppress-
ing that use-value in the process of expressing its value in the use-
value of another commodity. When the social connectedness of a
commodity is expressed in the use-value of another commodity,
this phenomenal form is exchange-value. Value-form theory
shows the necessary steps in moving from this initial expression of
exchange-value to the point where the use-value of one com-
modity becomes set aside as the universal value reflector of all
other commodities. Through this 'universal equivalent' or
money, value has achieved an external unifying standard that
makes all commodities immediately equatable with each other.
Thus the dialectic has shown how money is necessarily generated
out of the imminent contradiction between value and use-value
within the commodity.
Money makes the exchange of commodities C-M-C possible,
and through this establishes a market where exchanges become
interconnected so that the sale by one person is the purchase by
another, who in tum had to sell something to make the purchase.
But this social world of value connections is constrained by the
42 Political Economy

use-value wants of the exchangers who sell commodities they do


not want to get those that they do. When they get what they want,
the exchange stops so that the motion of value is constrained by
the consumption of use-values in C-M-C. With the formula
M -C-M', or buying in order to sell, money is withheld from the
market not to save up for some article of consumption needed by
the saver, but to buy commodities not needed and to resell them
for a profit. Now value expands itself without the use-value
constraints of C-M-C, and we have arrived at the primitive
circulation form of capital (using money to make more money).
Thus the necessary beginning of the dialectic is the commodity-
form and it is out of its inner contradiction between value and
use-value that the necessary sequence commodity, money and
capital unfolds. And although this sequence parallels that of
Marx in Capital, Marx does not make the dialectical logic
explicit.
As already stated, Uno divides the theory of a purely capitalist
society into three basic doctrines: the Doctrine of Circulation, the
Doctrine of Production and the Doctrine of Distribution. In the
Doctrine of Circulation, commodity, money and capital are
examined as circulation-forms without reference to their substan-
tive content. In the Doctrine of Production, commodity, money
and capital as circulation-forms are shown to be the phenomenal
forms of an underlying labour and production process. All
societies must have a labour and production process, but when
this is integrated with the commodity-economic principle of the
circulation-forms, a specifically capitalist production process is
formed. In the Doctrine of Production the contradiction between
value and use-value becomes a contradiction between the his-
torically specific capitalist circulation-forms and the labour and
production process which is the suprahistorical substantive base
of all societies. The overcoming of this contradiction generates
the specifically capitalist production process. The key to under-
standing this integration is the commodification oflabour-power
and the economic processes that maintain this commodification.
In the Doctrine of Production we investigate the capital-labour
relation that forms the substantive base of the capitalist mode of
production. In order to grasp clearly this relationship we must
assume that capital and labour are homogeneous.
In the Doctrine of Distribution, Sekine shows that capital can
maintain its unity while differentiating itself and reaching a modus
Theory of a Purely Capitalist Society 43

vivendi with alien elements. Capital is now grasped as a heterogen-


eity unified by the rate of profit. Technical differentiation
requires price categories, while reaching a modus vivendi with
landed property generates the theory of rent, and finally capital's
functional specialization in order to save on circulation costs
generates the theories of commercial capital and interest-bearing
capital. With the category of interest, capital itself becomes a
commodity and the dialectic achieves closure.
Sekine's Doctrine of Circulation roughly corresponds to
Capital Volume I, Parts I and II. The Doctrine of Production
corresponds to the remainder of Volume I and all of Volume II,
while the Doctrine of Distribution roughly parallels Marx's
Volume III. But within this overall correspondence there are
many differences stemming from the much tighter logical de-
velopment made possible by Sekine's self-conscious dialectical
logic. I shall tum now to explore some of these differences.

2 THE BEGINNING

In a dialectical theory the beginning is crucial since not only must


it be a necessary beginning relative to the object being theorized,
but also it contains the basic contradiction the unfolding of which
constitutes the dialectic. The beginning is the foundation upon
which the dialectic is built. If the foundation is not firm, the entire
theory built upon it will be weak. As Marx himself admitted, all
beginnings are difficult and are decisive for what is to follow. 9 In
referring to the presentation of value-form theory in Chapter 1,
Marx writes that 'the analysis of these forms seems to tum upon
minutiae. It does in fact deal with minutiae, but they are of the
same order as those dealt with in microscopic anatomy.'10 In
other words, since the beginning constitutes the foundation of the
theory, minute differences can make a momentous difference in
our understanding of the theory based on this foundation. A
small mistake at the beginning can reverberate through the entire
theory and undermine it as a whole. In what follows I shall try to
indicate some of the momentous consequences of minute dif-
ferences between Marx and Uno (and Sekine), and show how
Uno and Sekine's formulations help to resolve ongoing con-
fusions in the interpretation of the theory of value.
As I have already discussed, the dialectic of capital presupposes
44 Political Economy

a purely capitalist society. Marx was correct to start Capital with


the concept of 'commodity', because this is the most abstract and
simple form of capital. According to the dialectical logic ofSekine
and Uno, a commodity must be conceived as something that can
become capital in the same way that a primitive or embryonic form
of capital has the potential of synthesizing itself into the adequate
fully developed form of capital. Sekine emphasizes that to arrive
at a clear and precise conception of capital, we must begin by
grasping the very sharp contrast between mere goods or products
and commodities. The slightest dulling of this contrast at this
early stage of the dialectic can produce a great deal of confusion
and misunderstanding (as we shall see Marx does dull this
contrast). The concept of 'commodity' locates the totality to be
theorized since it is the most abstract form of capital, but the
contradiction that actually begins the movement of the dialectic is
the contradiction between value and use-value. Initially we can
only say of value that it is the quality of homogeneity that makes
all commodities exchangeable, as opposed to use-value, which
initially is the quality of heterogeneity in commodities. II A
commodity must be exchanged because it has no use-value to its
owner. Goods may sometimes be exchanged, as when a farmer
with excess eggs exchanges them for another farmer's excess
tomatoes. This sort of exchange between consumers each with an
excess wanted by the other is a barter. Barters are occasional and
sporadic deals between consumers and have nothing to do with
the commodity, which is always and from the beginning produced
for exchange. Commodities therefore cannot be bartered but
must be exchanged for money, because it is only with the
development of money that they can express their value, that is,
their homogeneity or their commodityness. It is therefore the
value aspect of commodities that differentiates them from goods
or products and that becomes the defining feature of capitalism,
to the extent that Marx often writes of capital as 'the self-
expansion of value'. Indeed the dialectic of capital itself is the
unfolding of this value aspect as it subsumes or prevails over
successive use-value constraints. It is only with pure capitalism
that all products necessarily become commodities.
Marx's presentation of the form of value or exchange-value is
confusing, because it suggests the possibility of an exchange
between commodities without the mediation of money - in other
words a barter. Marx starts his value-form theory with the
Theory of a Purely Capitalist Society 45

expression' x commidity A = y commodity B', suggesting that his


'elementary' or 'accidental' form of value is an actual exchange
ratio, or a barter. 12 But exchange-value cannot be a barter
exchange ratio if commodity exchanges do not take place without
money, and money has not yet been generated in the dialectic of
capital. In fact it is precisely through the theory of exchange-value
or value-form that we show the logical generation of money.
Sekine shows that the elementary form of value is a subjective
expression of value. The owner of commodity A expresses the
value of the commodity that he does not want in terms of the use-
value of a commodity that he does want. No actual exchange,
only a proposal for an exchange, takes place. The elementary
form of value, then, takes the form 'I am willing to exchange 100
bales of cotton for 10 ingots of iron.'
This mode of expressing the elementary form of value has
immense ramifications for the entire theory. I shall therefore
pause to note some of its important features. First and most
significant, it is not simply the equation of two commodities, but
is a subjective expression beginning with 'I am willing .. .' Thus
the dialectic begins with an active subject proposing an ex-
change.13 In the course of the dialectic this active subject is
converted into a passive subject or in the words of Marx into a
mere 'personification' of economic categories. It follows that the
subject, though made passive, does not disappear. As I shall argue
later, this point is particularly important to emphasize in the face
of the Neo-Sraffian tendency to equate the value oflabour-power
to a fixed basket of wage-goods in their theory of 'the production
of commodities by means of commodities'. Furthermore, this
latter expression can be misleading because the subjective
element, though made passive, does not disappear. Being clear on
this point is also important in developing the mediations between
pure theory and historical analysis which involves reactivating
the subjective factor. Marxian economics differs from classical
subjective theories of value which see the economy purely as a
resultant of individual decisions. But it also differs from Neo-
Ricardian accounts which tend to leave out the subject altogether.
Reification leads to the domination of the commodity over the
economic life of society, but the 'passification' of the subject that
results is tenuous and must be shown step by step at the level of
pure theory. Without such a dialectical approach economic
theory becomes excessively formalistic and the subject can only
46 Political Economy

be reintroduced in ad hoc ways in the move from theory to


history.
The second point that needs emphasizing about the elementary
expression of value is that it is only a proposal for an exchange.
This is important in emphasizing the distinction between com-
modity exchange and barter. A commodity can only be exchan-
ged for money, but money does not yet exist, and in fact value-
form theory is precisely a theory which demonstrates the
necessary derivation of the money-form from the commodity-
form. Actual exchanges can only occur after the generation of the
money-form and the price-form.
Finally, I use 'bales of cotton' and 'ingots of iron' instead of
'linen' and 'coats'. The reason is that the exchange is being
proposed by an incipient capitalist and not by a consumer. The
elementary value-form must be a form that can dialectically
generate the capital-form. Since 'bales of cotton' and 'ingots of
iron' are not normally commodities for immediate consumption,
my usage makes it clearer that we are dealing with merchant
traders or embryonic capitalists and not consumers bartering
excess goods.
The elementary form of value is a unilateral expression of the
value of cotton by the cotton owner in terms of iron. This
subjective and isolated expression of value must express the
homogeneity of commodities whereby they can be treated as
qualitatively the same and differing only quantitatively and thus
immediately equatable with each other. The expression' 10 ingots
of iron' is already money in embryo. In the expanded form of
value all commodity-owners express the values of their com-
modities in terms of the use-values of commodities they want. In
this form the isolated character of the first value-form is over-
come and the generally implicit in value is brought out; but this
form of value is chaotic because there is potentially an infinite
list of proposed exchanges without any unifying factor. This form
generates an indefinite number of small monies. The necessity for
money as universal equivalent now becomes apparent. It is only
with the generation of money that any commodity becomes
equatable with any other, so that commodities can be universally
exchanged and a system of normal prices can be established. With
the development of prices, the initial proposed exchange is either
socially confirmed or rejected. For example, my initial proposal
to exchange 100 bales of cotton for 10 ingots of iron may not have
Theory of a Purely Capitalist Society 47

been realistic, and according to normal prices I may have to offer


150 bales for 10 ingots. 14 According to Sekine: 'it is only when all
commodities reflect their value in the use-value of a single
commodity called "money" that the expression of value becomes
the universal, social act of pricing' Y
By showing that barter has no role in value-form theory, it
becomes clear that the theoretical object is capitalism, and that we
are proceeding dialectically from the abstract-in-thought (com-
modities in contrast to goods) to the more synthetic concrete in
order to show that the commodity-form must necessarily gen-
erate the money-form. Many interpreters of Capital have in-
correctly viewed the elementary form of value as a barter and
have followed this by positing a historical parallel to the logical
derivation of money. Value-form theory ends up being a synopsis
of history beginning with primitive barter and ending up with the
money-form. 16 Often Parts I and II of Volume I are seen as a pre-
capitalist or a fictional mode of production called 'simple
commodity production', which later is impinged on by capitalist
production relationsP But the theory of capital traces the
necessary inner connections of the capitalist mode of production.
No rigorous or dialectical theory of capital can be derived from
the specifically non-capitalist modes such as barter or simple
commodity production. In the expression of the elementary form
of value, 20 yards of linen = one coat, orthodox economics is
inclined to see a barter between two consumers, but 'the
consumer cannot possibly develop into a capitalist' .18 Only by
adopting the point of view of the seller are we adopting a point of
view that can develop into an adequate conception of capital by
developing the form of value. Value only concerns the seller since
to him his commodity is useless, while use-value 'is not simply the
use-value of an object of consumption, but a use-value from the
point of view of the purchaser of the commodity which still
belongs to its seller'. 19 Sekine argues that 'in order to fix value in a
determinant form the expression of value must, therefore, not be
studied in an actual process of exchange, but from the point of
view of the seller exclusive of the point of view of the purchaser'.2o
For this reason Uno and Sekine substitute 'I am willing to
exchange 20 yards of linen for one coat', for the expression '20
yards of linen = one coat', because this latter expression makes it
seem that an exchange has actually taken place. This is important
because the coat does not represent a use-value consumed by the
48 Political Economy

linen owner, but instead it is the elementary form of money, and


'money is the direct value-reflecting object since the con-
sumability of its use-value is irrelevant'. 21 Money 'is no longer
demanded for its own material use-value but for the social and
abstract use-value in that all commodity-owners wish to have it,
not for its direct use or consumption but for its having an
immediate purchasing power of all other commodities'.22 So we
see that it is very important to conceive of the owner of the 20
yards of linen as a merchant who eventually becomes a capitalist
rather than a consumer who wants to barter a commodity that is
not needed for one that is.

3 THE LABOUR THEORY OF VALUE

Marx's introduction of the labour theory of value in Chapter I of


Capital has perhaps been the most serious source of confusion in
the entire theory of capital. The work of Uno and Sekine
demonstrates that the labour theory of value can only be firmly
grounded in the dialectic of capital after the circulation-forms
and their logic have subsumed the production process. The
premature introduction of the labour theory of value confuses the
meaning both of the Doctrine of Production and of the Doctrine
of Circulation. Here Marx unwittingly violates his own stricture.
In a letter to Engels defending postponing the treatment of the
transformation of values into prices until Volume III, Marx
writes: 'If I were to cut short all such doubts in advance I would
spoil the whole method of dialectical exposition. ,23 By treating the
labour theory of value in advance of its proper location according
to the method of dialectical exposition, that is by introducing it in
the theory of circulation instead of in the theory of production,
the meaning of the labour theory of value is confused, its
theoretical grounding is severely weakened, and the method of
dialectical presentation is spoiled.
In Capital, Volume I, Chapter 1, Marx argues that in order for
two commodities to be exchangeable they must contain some
common property or substance that makes them equatable. Bya
process of elimination, Marx concludes that they have only one
property in common - that of being products of labour. Having
argued this, he must introduce the distinction between abstract
and concrete labour, skilled and unskilled labour, and finally the
Theory of a Purely Capitalist Society 49

concept of socially necessary labour-time. But in this context


none of these concepts can be properly theoretically grounded.
The labour theory of value is thus vulnerable to attack and has
been rejected by many economists from Bohm-Bawerk to
Steedman.
Instead of demonstrating the necessity of the labour theory of
value, Marx simply posits it. It is thus very easy for Bohm-Bawerk
to put forward another theory: namely, that what two com-
modities have in common that makes then exchangeable is utility.
In a similar vein, Steedman argues that the labour theory of value
stands as an obstacle in the way of an adequate theory of prices
and profits.
Uno and Sekine correct this weakness by demonstrating the
necessity of the labour theory of value to the dialectic of capital.
The Doctrine of Circulation, which begins the dialectic of capital,
only reveals the inner logic of the circulation-forms or the
operation of the form of value. Thus capital first appears as the
circulation-form M -C-M' and is in the first instance a method of
using money to make more money.24It is only in the Doctrine of
Production, after the circulation-forms have subsumed the
production process, that we can arrive at an adequate conception
of the capitalist production process. First and foremost a
capitalist production process requires the commodification of
labour-power, because only then can capital produce any com-
modity whatsoever in accord with social requirements. Accord-
ing to Sekine 'Just as money measures the value of all com-
modities because it can buy any commodity regardless of its use-
value, labour forms value because it can produce any commodity
indifferently to its use-value. ,25 In all economies there must be
some more or less efficient allocation of the total social labour-
time to produce the goods or commodities required by society. In
capitalism it is the commodity-economic principle that allocates
total social labour so that only that amount that is socially
necessary is applied to the production of each type of commodity.
It is through the exchange of commodities that social labour is
allocated in socially necessary amounts and it is the law of value
that regulates the exchange of products so that in a state of
equilibrium no labour is wasted. If too much labour relative to
social demand is devoted to a particular branch of industry, then
that does not count as part of the total value forming and
augmenting labour. In this way, social demand acts as a passive
50 Political Economy

constraint on value formation. Many interpreters of Marx fail


fully to appreciate the role of demand in value theory.26
This is an important point since without a full appreciation of
the role of social demand in the formation of value, the entire
labour theory of value is misconceived. The realm of circulation
and social demand acts as a passive constraint on value augmen-
tation, and those who fail to grasp this point arrive at a theory of
value that is essentially productivist and Ricardian.
The Doctrine of Circulation can only generate the form of
value (i.e. the commodity-form, the money-form and the capital-
form); the substance of value or the labour theory of value must be
developed in the context of the Doctrine of Production (since it is
here that we understand the creation of value). The Doctrine of
Production shows how the labour and production process
common to all societies operates under capitalism, according to
the circulation-forms and their logic. The only real social cost in
any economy is labour. In order to be viable, capitalism must be
able to reproduce itself by channelling total social labour
efficiently to meet social demand. Human labour is always
abstract, in contrast with the labour of bees, in the sense that it is
not pre-programmed and can produce many different things. But
this quality of abstractness is only perfected under the regime of
capital, where labour is used by capital to produce any com-
modity whatsoever with total indifference to its use-value. It is
this indifference which enables capital to move in response to
price changes so as to ensure that only the amount oflabour that
is socially necessary is devoted to the production of each type of
commodity. In short, it is the perfection of labour's abstractness
in a purely capitalist society that makes the labour theory of value
hold, or as Sekine puts it: 'socially necessary labour forms value
because it is the only factor of production that is not specific to
the production of any particular use-value'.27
In his article 'The Necessity of the Law of Value', Sekine shows
that the tendency towards the perfection oflabour's abstractness
or indifference to use-value flows from the basic condition for the
existence of capitalism, namely the commodification of labour-
power. In order to be viable any society must guarantee that the
direct producers receive the product of their necessary labour
since otherwise the continued existence of the direct producers
will be jeopardized. In the case of capitalist society, this means
that the working-class must be able to buy back the product of
their necessary labour with their money-wage. 'The workers must
Theory of a Purely Capitalist Society 51

receive real wages just enough to reproduce their labour-power,


neither more nor less, because in either case its supply dimini-
shes. ,28 In other words the perpetuation of labour-power as a
commodity must be secured, but if this is the case the labour
theory of value tends to hold; 'hence it follows that the validity of
the labour theory of value is equivalent to the viability of
capitalist society'. 29
The following quote from Sekine will help to situate what I
have just argued in the larger context of the law of value:

The law of value exhibits various properties arising from the


fact that in capitalist society all commodities are produced as
value indifferently to their use-values. The dialectic of capital
treats this fundamental law by virture of which capitalist
society hangs together in three particular aspects: they are the
necessity, the absolute foundation, and the concrete mode of
enforcement of the law of value. The necessity of the law refers
to the proposition that the historical existence of capalist
society is equivalent to the validity of the labour theory of
value, i.e., to the determination of value as the embodiment of
socially necessary labour. The absolute foundation of the law
of value establishes that its operation presupposes a feasible set
of technologies, the adoption of which guarantees positive
values. The concrete mode of enforcement of the law of value
shows how the law specifically enforces itself through the
motion of prices once a feasible technology is adopted, i.e., not
necessarily proportional to values and a general rate of profit
often different from the ratio of surplus value to the value of
total capital advanced. 30

This makes it clear that the labour theory of value does not imply
production prices proportional to values, but does imply that 'all
capitalistically produced commodities have positive equilibrium
prices, whether or not proportional to values, because they embody
value (emphasis added).3'

4 CIRCULATION, PRODUCTION, DISTRIBUTION

By introducing the labour theory of value, implying production,


very early in his discussion of circulation, Marx's presentation
tends to undermine not only the labour theory of value as argued
52 Political Economy

above, but also the importance and integrity of circulation. In


recent years there has been a continuing debate between those
who emphasize circulation and those who stress production. 32
Those who emphasize the primacy of production tend to
overemphasize the active production of value in the production
process and to neglect the passive constraint of social demand on
value formation. A one-sided stress on the primacy of production
sometimes produces an economics closer to Ricardo than to
Marx, in the sense that the undialectical emphasis on production
produces a system of interconnected errors, including an underes-
timation of the autonomy and importance of circulation, a failure
to grasp value-form theory and hence the nature of capitalist
money, a failure to understand the specificity of variable capital
and the commodity labour-power and a failure to grasp the
relation between value and price. Larger methodological errors,
such as adoption of the logical-historical method, an abandon-
ment of dialectics and a failure to theorize the historical
specificity of capitalism, also arise. The outcome of these errors is
usually to abandon the theory of value altogether or to collapse it
into a sociology of class struggle.
Those who overemphasize circulation and neglect production
make some of the same errors. In its extreme form this tendency is
simply mainstream bourgeois economics, which ignores the class
relation, denies crisis (or has a most superficial explanation of it),
and develops formal models that completely ignore the historical
specificity and uniqueness of capitalism. Placing too much weight
on circulation can also lead to underconsumptionist economic
theories.
It is correct to insist upon the primacy of production in the
sense that this is where value is produced, but only within a
dialectical totality that grasps the necessary interconnection of
production with circulation. Perhaps one of the best antidotes to
all these one-sided approaches is a careful reconsideration of the
discussion of the three forms of the circuit of capital at the
beginning of Volume II of Capital. I shall not attempt this here,
but shall instead note that our understanding of the Doctrine of
Distribution (Marx's Volume III) depends very much on a prior
grasp of the relation between circulation and production.
Those who one-sidedly emphasize distribution tend to focus
single-mindedly on 'the transformation problem' or on the falling
rate of profit. Instead of carefully reconsidering circulation and
Theory of a Purely Capitalist Society 53

production from the point of view of the inadequacies of Volume


III (i.e.
the Doctrine of Distribution), they use these inadequacies
as an excuse to reject value theory in favour of completely alien
doctrines of price and profit. But a theory of prices and profits, no
matter how logically and formally worked out, is useless unless it
is part of a theory of the inner organization of the capitalist mode
of production. Distribution must be grounded on an accurate
rendering of circulation and production and their interrelation.
Before leaving this discussion, it is important to comment
briefly on the much-disputed Section 4 of Chapter 1 of Capital on
the fetishism of commodities. In many ways the 'fetishism of
commodities' is a key concept in understanding the capitalist
mode of production; and yet its location and manner of
presentation in Capital have given rise to confusion. The
'fetishism of commodities' refers to all the cognitive confusions
which arise from the peculiar character of the commodity-form.
Fetishism first appears with the money-form which is a particular
commodity made universal equivalent. Marx discusses the 'enig-
matic' appearances that result from a particular use-value
becoming the universal value-reflector. He also refers to the
tiresome debate over whether money has value by nature or by
convention. It becomes clear that neither of these alternatives is
quite adequate when we come to understand that money has
value because of the deep structure of the capitalist economy - a
structure that is both material and social. The reason why the
money-form gives rise to fetishism is because of its abstractness,
or in other words its loose connection to its underlying material
and social reality. This peculiarity of the money-form generates
fetishism throughout the theory of the purely capitalist society.
For example, the wage-form makes it appear that a definite
quantity of labour is being paid for. Circulation-forms often
obscure the extraction of surplus value as do the different forms
of surplus value (rent, interest, profit).
Besides discussing fetishism all through the three volumes of
Capital, Marx devotes Section 4 of Chapter 1 to an extended
discussion of it. But if there is to be a separate section on fetishism
this is not where it belongs. This is because fetishism becomes
most clear only after we have before us both the form and
substance of value. The fetishism of commodities is precisely all
the ways that the circulation-forms obscure the formation and
augmentation of value. Thus this concept is most clearly under-
54 Political Economy

stood when we return to the circulation process within the


Doctrine of Production only now with the process of production
fully specified and embedded in the circulation process. M -C-M'
is now altered to M-C ... P ... C'-M', so that we must take
into account that which is momentous for the entire theory,
namely that the capitalist circulation process is interrupted by the
capitalist production process. Marx can only make sense out of
the fetishism of commodities in Chapter 1 because he has already
introduced the labour theory of value, but ifhe were not to violate
his own dialectical method of presentation, then both would have
been developed within the Doctrine of Production.

5 THE LAW OF POPULATION

Uno and Sekine formulate the law of population differently from


Marx. They make it clear that the law of value must be
supplemented by the law of population because labour-power is a
peculiar commodity that cannot be reproduced by capital itself.
Like Marx they see that a surplus population is a necessity in
order for capital to expand because it does not have the capability
of producing more workers on demand. Capital can expand its
production even when the labouring population is given and fixed
by introducing labour-saving technology, or what is the same
thing, by raising the organic composition of capital. 33 But where
they differ from Marx is in their understanding of the introduc-
tion of new labour-saving techniques. Major innovations involve
sizeable new investments in fixed capital, and such investments
are usually too costly unless the old fixed capital (old technique) is
close to being fully depreciated or the new investment is forced
upon capital by the intensity of competition in a depression. Uno
argues:

Although capital is generally motivated by the production of


relative surplus value to improve upon the existing method of
production, it is not directly concerned with the propagation of
improved techniques. The general adoption of new productive
methods must, therefore, in principle, be forced upon capital
by the severity of competition that it faces in the phase of
industrial depression. 34
Theory of a Purely Capitalist Society 55

Thus in a purely capitalist society a widening phase of capital


accumulation alternates with a deepening phase. In the widening
phase the scale of capitalist production is expanded on the basis of
a particular fixed capital compliment and technique. As long as
surplus population is available capital can expand on the basis of
the old techique while the capital investment fixed in that
technique depreciates. As the reservoir of labour dries up, wages
begin to rise and an excess of capital relative to surplus
population develops. As the marginal profitability of capital
investment approaches zero, the interest rate rises because of a
shortage of loanable funds resulting from the slow-down of
capital expansion. The result is the periodic crisis characteristic of
capitalism. The severity of competition that results forces capital
to reorganize and to introduce new labour-saving methods of
production. The reserve army of labour is replenished and a
revolution of value takes place reconstituting the basic
capital-labour relation. Furthermore, Sekine argues:

The law of capitalism that brings about this renewal of value


relation by forcing capital to innovate its technological base in
the event of the excess of capital is called the law of surplus
population or that of the falling rate of profit depending on the
way the same thing is looked at from different angles. 35

This conception of the law of population ties in with the notion


of 'surplus population' or 'industrial reserve army' with the
deepening and widening phases of capital accumulation, which
are in tum tied in with the increasing difficulty of maintaining the
rate of profit as organic composition rises in each deepening
phase. As a result the law of value and the law of population come
together at the most basic point, namely the necessity to secure
the commodification oflabour-power, and they show that periodic
crisis is needed both to secure labour-power as a commodity and
to bring about renewal and innovation of productive technology.
Periodic crisis reveals that both labour-power and fixed capital
are difficult to manage capitalistically.
According to Uno and Sekine, Marx's discussion of accumula-
tion in Volume I of Capital is misplaced and should be discussed
in connection with the reproduction schema at the end of Volume
II. This is because it is only in Volume II that Marx develops the
56 Political Economy

concept of 'fixed capital', but this concept is crucial to understan-


ding the widening and deepening phases of accumulation and an
adequate conceptualization of these phases is crucial to the whole
theory of periodic crisis. There are passages in the Volume I
discussion of accumulation that suggest that the rising of organic
composition is a continuous process, but this completely ignores
the problems of fixed capital replacement. Even in Volume II
where Marx suggests that fixed capital replacement is the material
basis of periodic crisis, this fruitful idea is never really developed
and integrated into the theory.

6 ACCUMULATION AND REPRODUCTION

Marx's reproduction schema have been much abused by sub-


sequent interpreters. They have been used to generate crisis
theory, to generate a theory of imperialism, and to generate an
equilibrium model of capitalism. Both Rosdolsky and Mandel
argue against these misuses of the reproduction schema and in
favour of a highly limited use - namely to demonstrate the
possibility of capitalism. 36 The work of Uno and Sekine agrees in
general with the position outlined by Rosdolsky and Mandel,
only Uno and Sekine go much further in specifying the precise
character and function of the reproduction schema in the dialectic
of a purely capitalist society.
Within the dialectic of capital the reproduction schema have a
very specific and limited use. What they demonstrate is only that
capitalism while producing all products anarchically as com-
modities can reproduce and expand by maintaining an
appropriate division between basic and non-basic goods. The
reproduction schema look at the capitalist process of accumula-
tion in a one-sided and highly abstract and schematic way.
Department I produces means of production or basic com-
modities, and Department II produces means of consumption or
non-basic commodities. In simple reproduction all the surplus
value is consumed by capitalists and in expanded reproduction
some surplus value is reinvested.
Since neither department is self-sufficient, an exchange must
take place between them, such that the constant capital in
Department II must be less than or equal to the sum of variable
capital and surplus value in Department I. Sekine argues that this
Theory of a Purely Capitalist Society 57

exchange relation is not an equilibrium condition, but is an


intersectoral constraint that capitalism must meet in order to
reproduce itself. 37 The reproduction schema are not an
equilibrium model but are a circular flow model at a high level of
abstraction. ACcording to Sekine, 'The theory of the reproduc-
tion-schemes, therefore, does not demonstrate whether a capital-
ist economy can or cannot maintain an equilibrium; the theory
shows whether or not the capitalist economy would continue to
be viable, if it always maintained its equilibrium.'38
All the variables within the reproduction schema are values.
This is because at this stage of the dialectic, we have not yet
introduced the concrete capitalist market which in dealing with
technical heterogeneity gives rise to prices of production. It is
appropriate that the reproduction schema should be expressed in
value categories because we are still considering capital and
labour to be homogenous. That is, we are still focusing on the
basic capital-labour relation that underlies the capital market,
and this relation is articulated in value categories. Value
categories do not deal with differences in technique, so that we
must assume a constant organic composition of capital within the
reproduction schema. Furthermore, as Sekine has convincingly
argued, socially necessary labour is only that labour that is
necessary to meet social demand, so that labour which is
unrealized or wasted does not count as part of value-forming
labour. Value categories imply an equilibrium, and there cannot
be any unrealized value. Therefore there cannot be any such thing
as a 'realization problem' in connection with value categories.
Since the reproduction schema are expressed in value categories,
they assume an equilibrium, and therefore cannot be used to show
any sort of disequilibrium, disproportion or underconsumption.
The reproduction process of capital is first of all the reproduc-
tion of workers and capitalists. 39 But from the point of view of the
reproduction schema, we cannot fully grasp how the reproduc-
tion of labour-power as a commodity is maintained. This is
because the schema simply assume that adequate labour-power is
always available as a commodity, and hence only view the
reproduction of labour-power from the point of view of wage-
goods.40
It now becomes clear that the reproduction schema in their
one-sided abstractness must be supplemented by the theory of
accumulation with its law of population and widening and
58 Political Economy

deepening phases. The reproduction schema are too abstract and


formal to deal with the problem of fixed capital replacement and
with the reproduction of labour-power as a commodity; and
therefore the reproduction schema are also not the appropriate
place from which to derive a theory of crisis. To deal with these
issues, we need the theory of accumulation which shows that the
difficulties that capital has in securing labour-power as a
commodity and in replacing fixed capital are deep problems that
are interrelated and that require periodic crisis for their resolu-
tion.
From the standpoint at which we have arrived, we can now see
that the reproduction schema can only deal with capital accumula-
tion in its widening phase, because a schema that is so abstract
and formal is too restrictive a format for the full development of
the law of population and the problem of fixed capital re-
placement. 41 The reproduction schema simply show that capital-
ism can fulfil a basic technical constraint common to all
economies; namely, that basic and non-basic goods must be
produced in appropriate quantities ifthe economy is to reproduce
itself or to expand.
Some Marxists have used the reproduction schema as models
for capitalist accumulation as a whole. 42 If what I have argued is
correct, then this is clearly an error. Though the capitalist mode of
production tends towards equilibrium, it does this only in the
course of passing through cycles, so that it is most likely to
approach equilibrium in the prosperity or widening phase before
the excess of capital sets in. The urge to fit the entire capitalist
mode of production into such a formalistic system as the
reproduction schema is not Marxian but neoclassical. We cannot
fit the law of population and fixed capital replacement into such a
framework, much less the subtleties associated with market price,
rent and interest. There is a reason why the reproduction schema
occur at the end of Volume II and not the end of Volume III of
Capital, that is, because Marx never thought such schema could
possibly serve to encapsulate the capitalist mode of production as
a whole.

7 THE TRANSFORMATION PROBLEM

My discussion has indicated some of the confusions that arise


from Marx's lack of precision in his presentation of 'value
Theory of a Purely Capitalist Society 59

categories'.43 In particular I have tried to show how seemingly


small details in the presentation of value-form theory in Chapter I
place the entire theory on shaky foundations. This shakiness
becomes most obvious in Marx's discussion of the relation
between values and prices, particularly in Volume III with the so-
called 'transformation problem'. The difficulty in mathematically
transforming value magnitudes into price magnitudes has been
the Achilles heel of Marx's Capital.
Uno and Sekine point out that values do not present any
insurmountable difficulties to the theory of price determination if
the dialectical nature of the theory of capital is kept in mind.
Because many interpreters have been trained in the positivist or
empiricist tradition or have been influenced by the hegemony of
this tradition, they fail to grasp the dialectical logic of Capital.
Marx himself helps these interpreters by not being explicit and
clear about his dialectical method or rigorous enough in his
presentation of the theory of capital as a dialectic. Because Marx
continually gives quantitative examples to illustrate value rela-
tions, he gives the impression that a system of value quantities
exists quite independently of the system of price quantities and
that the price system must be derived mathematically from the
value system. This impression is wrong. Once it is understood that
the theory of capital is a dialectic, it follows that the sequence of
categories must move from the abstract to the concrete. In this
way, the movement from one level of abstraction to another may
be considered a 'conversion' or 'transformation'. Thus the
commodity-form is 'transformed' into the money-form, which is
'converted' into the capital-form. 44 The reason why value
categories are used exclusively in Volumes I and II is that the
motion of commodities and money is being examined from the
point of view of the workers-versus-capitalist production rela-
tion. At this stage of the dialectic both capital and labour are
treated as homogeneous so that the basic production relation can
be examined in its purity. As we move through the dialectic, value
becomes ever more concrete, or, what is the same thing, ever more
capitalistically specified. In Volume III value reaches its most
concrete expression in the form of market prices, which converge
upon market production prices. It is only in Volume III that value
expresses itself in a quantitative form that approaches the actual
prices in the market of a purely capitalist society. In order to reach
this point, values must be modified to account fully for the price
effects of the actual technical diversity of capital and for the price
60 Political Economy

effects of supply and demand. This degree of concreteness in use-


value production can be suspended earlier in the dialectic because
it has no place at a level of abstraction that is exploring the
necessary connections between circulation-forms and between
circulation-forms and basic production relations. In a dialectic
the sequence of categories is a necessary sequence so that a more
concrete category cannot be posited before its time has arrived -
all categories necessary for its full understanding must already
have been derived, and the step to the more concrete category
must be shown to be a necessary step. Thus the quantitative
expression of values earlier in the dialectic must not be read to
represent some independently determined quantitative system,
but rather simply to be more theoretically abstract or more
theoretically primitive representations of price where the tech-
nical differentiation of capital has not yet been introduced and the
capitalist market is held implicit. The basic confusion, then,
around the 'transformation problem' comes from seeing as a
mathematical transformation the dialectical movement from one
level of abstraction to another. What is essentially a conceptual
transformation is seen as a mathematical transformation. 4s
Another source of confusion on the relation between values
and prices flows from Marx's misleading presentation of the
labour theory of value. By simply positing labour-value in
Chapter I of Capital, Marx gives the impression that value is
simply the addition of units of labour. But as I have previously
argued, the labour theory of value cannot be clearly stated and
defended until after the circulation-forms have been developed. It
then becomes clear that circulation acts as a passive constraint on
value formation and augmentation, so that labour expended on
commodities in excess of social demand is wasted and is no part of
value. This understanding of the passive constraint placed by
supply and demand on value formation is essential to understand-
ing the theory of market value and market price, which Marx left
in a very unfinished state. Supply and demand playa crucial role
in our understanding on how market value resolves issues
involving choice of technique. This point will be expanded later.
According to Uno and Sekine the movement from values to
prices is a movement within the dialectic of capital from one level
of abstraction to another. To be more specific, prices are the way
that values express themselves in the capitalist market, or in the
words of Sekine 'prices are simply the capitalistically more
congenial form of values'.46 In the Doctrines of Circulation and
Theory of a Purely Capitalist Society 61

Production where the basic worker-versus-capital relation is


developed, capital remains homogeneous and use-value produc-
tion is treated in its generality without reference to diversity of
techniques. In the Doctrine of Distribution we must reconsider
value from the more concrete perspective of the capitalist market
and the technical heterogeneity of capital. Because of the
technical diversity of capital and because of supply and demand
conditions in the market, prices diverge from values, but this
divergence is never arbitrary.
According to Uno and Sekine, a society is viable 'if and only if
the direct producers have a guaranteed access to the product of
their necessary labour' .47 When it comes to calculating prices this
fundamental necessity of viability constitutes the 'basic con-
straint' on the capitalist market that constitutes the direct role of
the law of value in constraining price formation. According to the
basic constraint 'the money value of wage goods currently
produced must not differ from the money value of labour-power
presently employed; for if this condition were violated for long,
labour-power would not remain as a commodity and the
capitalist market would be deprived of its own foundation'.48
Value categories grasp the reified social relation or the workers-
versus-capitalist relation that is the foundation of the capitalist
mode of production, while price categories conceptualize the
thing-to-thing relation among commodities in the capitalist
market as if value categories did not exist. The determining of
prices as if values did not exist is made possible by reification, and
the conclusion made by some economists that therefore values are
irrelevant is one example of what Marx calls 'fetishism of
commodities'. According to Sekine, prices are calculated from
technical data and the basic constraint and not from values. But
since there is a determinate relation between prices and values,
once prices are determined values are as well. The transformation
of values into prices is basically a conceptual movement from a
more abstract to a more concrete level of analysis, but once
having made this move, prices and values are simultaneously
determined quantitatively by technical data and the basic con-
straint. We do not transform mathematically the value system
into the price system or the price system into the value system,
rather the two systems are quantitatively determined simultan-
eously.49
The relation between value and price is still not completely
specified with the determination of production prices. Production
62 Political Economy

prices explain prices from the standpoint of technical differences


between different branches of industry. But there may also be
technical differences within an industry, and the determination of
the technique that determines price requires the theory of market
value.
The market value of a commodity is not necessarily equal to the
quantity oflabour actually expended even in equilibrium on its
production, but is equal to the quantity of labour that 'society
in its capacity of consumer' is obliged to spend for the marginal
production of that commodity. 50
According to this doctrine then, it is the social labour necessary
for its marginal production that determines the market value of a
commodity and the market production price is determined by the
technique that supplies the marginal commodity. According to
supply and demand conditions and technical factors it may be the
more productive or less productive technique that supplies the
marginal commodity. Thus it is only with the formation of the
optimum allocation of social labour that all commodities are
produced in socially required amounts and only that labour that
is socially necessary is devoted to the production of all com-
modities. It is characteristic for capitalism, which is a reified
economy, to achieve this allocation of social labour in an indirect
manner.
Thus capital in its individual pursuit of a higher profit-rate by
reducing the labour-cost per unit of the commodity unknow-
ingly maximizes the production of both absolute and relative
surplus value. The rate of surplus value which is the ratio of
surplus to necessary labour will then tend to be both maximized
and equalized throughout the economy, apart from the extra
surplus value that may be earned in the process of introducing a
new technology.51

8 SRAFFIAN MARXISM

Ever since Bohm-Bawerk some people have argued that it is not


possible mathematically to derive prices from values and that
therefore Marx's value theory is at best unnecessary and at worst
Theory of a Purely Capitalist Society 63

metaphysical or in some sense mystifying. Though such attacks


have often come from bourgeois economists, recently such
arguments have come from Marxists themselves. Sraffian Marx-
ists in particular have gained a following and appear to be
convinced of the correctness of their position. Referring to the
work of Sraffa and Garegnani, Marco Lippi states: 'We owe to
these authors the complete and definitive solution of the problem
of prices in the theory of Marx and of the classical economists. ,52
Steedman writes: 'The Sraffa-based critique of Marx cannot be
met head on and rationally rejected, for the simple reason that it is
correct. ,53 Or Steedman again: 'Some Marxist economists will, of
course, be reluctant to concede the irrelevance of the "labour
theory of value", but it is now generally recognized that the
demonstration of that irrelevance is logically impeccable.,54
Hodgson uses Kuhn's theory of scientific revolutions to picture
those Marxists who still cling to the labour theory of value as
'normal scientists' still clinging to the old 'paradigm' very much
as some clung to the Ptolemaic view of the universe in the face of
the Copernican revolution. 55
The self-confidence of the Sraffian Marxists seems to be based
on a supposedly rigorous theory of price determination. General-
ly they have done well in the debate with orthodox Marxists
because orthodox Marxists have held too closely to the text of
Capital, instead of immersing themselves into the logic of capital.
As a result, some orthodox Marxists have been caught up in
fruitless attempts to solve the transformation problem (as
formulated by Marx) while others have retreated to philosophical
defences of the labour theory of value, having been driven from
the terrain of economic theory by the Sraffians. 56 And yet the
orthodox Marxists are much closer to the truth than the Sraffians
and have good instincts in coming to the defence of the
labour theory of value. The power of the Sraffians is the power of
mathematics and formal models, and they are correct in rejecting
the effort to derive prices from values. The problem is that their
theory of price determination is not a theory of capitalist prices
and their understanding of the law of value is entirely inadequate.
The Sraffians are far too ready to abandon value categories in
favour of their formally correct theory of price determination.
Instead of trying to correct the flaws in Marx's formulation of the
law of value, they play up the flaws and reject the theory
64 Political Economy

altogether. Their need to be unchallengably correct has backed


them into formalism and into largely abandoning Marx's Capital
as the foundation of Marxian social science. They fetishize the
theory of price determination, so that the inadequacy of Marx's
Capital on this score is sufficient cause to reject value theory
altogether. Their project is to try to reconstruct Marxian
economics by grafting a sociology of exploitation onto a Sraffian
theory of price determination. But this approach completely
conflates the logical and the historical while destroying the inner
coherence of the dialectic of capital. The result is that the
objective foundation of Marxian social science is completely
undermined.
The strength of the dialectic of capital is that it conceptualizes
the thing-to-thing relations of the capitalist market as objectified
social relations. The dialectic of capital is objective because it
theorizes social relations that are not simply intersubjective but
are reified or objectified by being subsumed to the motion of
commodities. If we restrict economic theory to commodity-as-
thing, we can produce formally rigorous mathematical models,
but it is no longer clear how they related to the substance of
socioeconomic life. If social relations are not reified it is possible
to construct a sociology of exploitation using analytic constructs
in the mode of Weber, but such an approach is fundamentally
subjective and can at best yield conjectures. The falling apart of
the material and the social undermines the possibilities of an
objectively grounded social science; and in its place yields
formalistic economics and subjectivist sociology. Unfortunately
this is the trend ofSraffian Marxists; their tendency is to abandon
any effort to theorize the necessary inner connections of the
capitalist mode of production in favour of a formally 'correct'
model of prices and profits attached to a sociology of exploita-
tion.
In a recent article, Sekine demonstrates that problems posed
for the labour theory of value by choice of technique, heterogen-
eous labour (the problem of skilled labour) and joint production
can all be solved by an adequate development of the theory of
market value, which Marx left in an unfinished and unsatisfac-
tory state. 57 Sekine also points out some of the difficulties of
Sraffian formalism. Some Sraffians have relied upon Steedman's
article 'Positive Profits with Negative Surplus Value' to argue
Theory of a Purely Capitalist Society 65

that value categories are not just futile but error-laden. 58 But
Sekine argues convincingly that the technology upon which
Steedman bases his argument cannot be capitalistically operated.
From the point of view of capitalism, Steedman's technology is
economically meaningless, so that his mathematically correct
proof proves nothing about capitalism, or about value
categories. 59
Besides failing to see the dialectical logic of the theory of
capital, the major error of the Sraffians is to give the value system
no other significance than as a quantitative base for deriving
prices and profits. But value categories rigorously theorize the
necessary inner connections of pure capitalism that must underlie
the capitalist market and thus lay the institutional base and modus
operandi for deriving a specifically capitalist theory of prices and
profits.
In the Dialectic ofCapitalSekine argues that all transformation
theories which, following von Bortkiewicz, try to solve 'price
equations by means of the physical wage-rate or . . . the
commodity-complex which forms the real wage-rate are in-
valid,.60 This includes Morishima, whose effort to arrive at a
'labour-feeding input coefficient' amounts to reducing the con-
sumption of workers to a technology as if 'capitalism possesses an
unseen agency that prescribes the physical wage-rate' like a
medicine. 61 This also includes von Neumann and the Sraffians,
for whom the reproduction of workers is no different from the
reproduction of horses and cows. Sekine aptly calls this method
of wage determination 'the fodder method', and argues that such
a technological reduction of workers' consumption, though
mathematically neat, produces a fundamental distortion of how
capitalism operates and therefore produces false production
prices based on a fixed basket of wage-goods. In capitalism the
reproduction of labour-power is achieved by individual consump-
tion outside the production process. The reproduction oflabour-
power cannot therefore be collapsed into the production
process. 'Capitalism possesses no Stalinist authority prescribing
the consumption-basket.,62 The law of value must preserve the
basic capital-labour relation despite the complete freedom of
each worker to buy wage-goods. This is why Sekine's theory of
price determination uses the 'basic constraint' as opposed to the
fodder method. This is also why the Sraffians, who reduce the
66 Political Economy

reproduction of labour-power to the reproduction of cattle,


arrive at prices of production that are capitalistically meaningless

For suppose indeed that all workers are paid the physical wage.
That would mean that every week they are forced to convert
their money wage into, say, fifty cigarettes whether they smoke
or do not, a bottle of vodka whether they drink or not, a lipstick
and two razor blades whether they are male or female, some
school supplies and a box of disposable diapers regardless of
the age of their children, etc. . . . Even if this were the case in
the first instance, the existence of the free capitalist market
would surely not prevent the workers from actively retrading
their commodities among themselves in an effort to achieve a
more satisfactory assortment of consumable goods. In that
process, however, not only must the prices of wage-goods but
also the rate of profit and through it all other prices must
change from those that would prevail in the absence of
retrading. What then is the point of studiously calculating false
production-prices first on the Bortkiewiczian assumption of a
fixed complex of wage-goods, only to discover that real
production prices deviate not only from values but also from
false production prices. 63

From the point of view of the operating principles of capitalism,


the Sraffian theory produces false production prices. An extended
mathematical demonstration of this is contained in Sekine's
Dialectic of Capital. 64
Besides producing wrong production prices, the fodder method
also makes it impossible to generate an economically rigorous
notion of exploitation. This is because, according to the fodder
method, there is no reason to limit exploitation to living labour-
power since animals and machines can also be exploited.
Exploitation then becomes a totally meaningless concept. This
explains why Marxian Sraffians who want to maintain the
concept 'exploitation' must resort to sociology to supplement
their formalistic economic theory. The result of this is a 'logically
impeccable' price theory that in substance is wrong, supplemen-
ted by a sociology of exploitation which, lacking any grounding
in the objectified economic relations of capitalism, must neces-
sarily be Weberian and subjectivist. This amounts to a substantial
improverishment of the Marxian theoretical project.
Theory of a Purely Capitalist Society 67

9 CRISIS THEORY

Crisis theory is another area where there has been a good deal of
debate, and where inadequacies in Marx's formulations have led
some Marxists to abandon Marx's theory of crisis. Uno and
Sekine have important contributions to make in firming up
Marx's theory of capital on this issue as well. To begin with, it
must be understood that it is somewhat artificial to speak of
Marx's theory of crisis as if it were a separate theory, since in a
sense all three volumes of Capital constitute Marx's 'crisis
theory'. Crisis theory, then, is an analytical separation of certain
elements from the dialectic of capital for the sake of focusing on
this special issue. With this important qualification, I shall
proceed to discuss Uno and Sekine's dialectical reconstruction of
Marxian crisis theory.
It is often stated that the periodic crisis of capitalism most fully
exposes the contradictions of the capitalist mode of production.
N ow to review the discussion so far, the basic contradiction of the
dialectic of capital is between value and use-value, or in other
words between the commodity-economic principle and the
concrete requirements of real economic life. The dialectic of
capital moves from the abstract to the concrete by value
'overcoming' successive use-value constraints in order to secure
within its own motion the basis for its continuing existence and
expansion. The use-value that offers the most resistance to
commodification is labour-power and at the same time the
commodification oflabour-power is the most important founda-
tion of the capitalist mode of production, since it is this
commodity that secures for capital the basis of value expansion
within its own motion. And, because labour-power cannot be
capitalistically reproduced in response to increased demand, the
law of value must be supplemented by the law of surplus
popUlation in order to ensure the continued reproduction of this
key commodity. Because of the central importance of labour-
power and the difficulty in securing its continued reproduction as
a commodity, we would expect the contradictions of capitalism
and particularly capitalist crisis to centre around the com-
modification of labour-power.
The continued commodification of labour-power is only
secured through periodic crisis produced by the joint operation of
the law of value and the law of population. In its widening phase
68 Political Economy

of accumulation, capital can expand by expanding production on


a given technological base thus avoiding expensive new invest-
ments in fixed capital. This phase is typically without the large
advances in productivity that come with new labour-saving
technology so that as capital expands more and more workers are
needed until the reservoir of surplus population tends to dry up.
At this point wages rise, reducing the rate of profit and with it
investment outlets. At the same time as capital expansion slows,
the rising wage bill places pressure on loanable funds so that the
interest rate goes up. The lack of productive investment outlets
fuels speculative pressures which maintain artificially high prices
and interest rates. As the interest rate rises and the profit rate falls
a point is reached where new investment is not worth while and
capital contraction occurs with a vengeance leading to a sharp
reduction in economic activity with accompanying bankruptcies,
unemployment and excess capacity. In the trough of depression
wages and prices fall and excess capital is destroyed. Severe
competition between firms leads to a massive reorganization of
capital involving centralization and the introduction of new more
productive technology. As a result, the surplus population is
replenished and a new value relation is established between
capital and labour that serves as the basis for a new widening
phase of accumulation.
This account of crisis differs from Marx in clearly centring the
theory of crisis on the law of surplus popUlation and the renewal
of fixed capital consequent on revolutions in the methods of
production. Capital could in principle continue to accumulate
without periodic crisis but for the difficulty of securing the
commodification of labour-power and the 'lumpiness' of tech-
nological innovation and fixed capital investment. According to
Sekine, fixed capital has two aspects: it is firstly a reproducible
means of production and secondly a temporarily irreproducible
means of production comparable to land. 65 This is because no
firm can afford to abandon a major investment in fixed capital
that is supposed to depreciate in ten years after only 2 years, even
if a much more productive technique has been discovered and
introduced by a few firms. Disequilibriums that occur between
capitalistically produced commodities can generally be overcome
by the price mechanism. The basic source of disequilibrium that
underlies capitalist crisis must be related to commodities that the
price mechanism cannot so easily regulate. These two com-
Theory of a Purely Capitalist Society 69

modities are labour-power and fixed capital, and it is precisely the


difficulties in the regulating of these two commodities by the price
mechanism that calls forth periodic crisis. The approach of Uno
and Sekine is more radical than Marx in firmly rooting the
necessity of crisis in the process of accumulation prior to any
discussion of the falling rate of profit, and by demonstrating the
periodic radical change in production techniques that must take
place to secure the continued availability of labour-power as a
commodity:

The fall in the general rate of profit indicates that this


fundamental adjustment involves a whole revision of the
workers-versus-capitalists relation rather than mere changes in
capitalist-to-capitalist relations observable on the surface of
the commodity-exchange market . . . the excess of capital
issues from the fundamental chasm between the products of
capital as a whole and labour-power which capital cannot
directly produce ... nothing short of a structural reform in the
technological base of society can save capitalism from the peril
of destruction. 66

Marx relies too heavily on the rate of profit alone and does not
root his discussion of the declining rate of profit in the alternate
widening and deepening phases of accumulation, so that it
becomes easy to treat the rate of profit formally and argue that it
has no tendency to fall. Uno argues that:

there exists no inherent limit to the expansion of capital except


the availability of additional labour-power . It is the incapacity
of the capitalist method of production directly to regulate the
supply oflabour-power that determines the underlying cause of
industrial cycles. Indeed, relative surplus population is formed
in the phase of depression so as to allow an expanded
reproduction in the subsequent phase of prosperity.61

When the theory of crisis is not firmly rooted in the law of surplus
population it is easy for formalists to argue that the rate of profit
has no more tendency to fall than to rise. 68
According to Sekine, the law of the falling rate of profit holds
in a purely capitalist society because the higher the organic
composition of capital, the more difficult it is for increases in the
70 Political Economy

rate of surplus value to offset the rising organic composition of


capital. To be more precise, the higher the organic composition of
capital, the less effective is the rise in relative surplus value during
the deepening phase in offsetting the rise in organic composition
of capital.
Marx's discussion of countertendencies to the falling rate of
profit also leads to confusion because most of the countertenden-
cies that he mentions do not even belong to the level of analysis
that we are concerned with. The only countertendency that
logically stems from the accumulation of capital as such is the
tendency for the rate of surplus value to rise due to an increase in
the production of relative surplus value. As argued in the previous
chapter, countertendencies such as foreign trade or pushing
wages below the value of labour-power cannot be part of pure
theory.
The issue of countertendencies brings up again the issue of the
relation between the logical and the historical. Much of the
discussion of crisis theory has been seriously hampered by
confusions around this issue. 69 The levels of analysis approach of
Uno and Sekine can help resolve many of the confusions. The
theory of crisis that is developed by the dialectic of capital for a
purely capitalist society cannot be directly applied to the current
crisis since we do not live in a purely capitalist society. The society
that we live in today is in fact far removed from pure capitalism.
Though pure theory cannot be directly applied to the current
conjuncture, an understanding of pure capitalism can help us to
clarify what is happening today. In so far as the state manages the
reproduction of labour-power and the circulation of money and
credit, labour-power and money have become de-commodified
(i.e. not regulated by the market principle). It seems as though the
current crisis cannot be rigorously theorized in value categories;
and yet value categories can help us clarify the empirical situation
and understand its structural necessities and range of pos-
sibilities. The debates between various schools of crisis theory
such as underconsumption, declining rate of profit, dispropor-
tionality, profit squeeze, etc. at the level of a purely capitalist
society are often confused with considerations of which one best
explains the current conjuncture or which one is the least
reformist in the current conjuncture. But these are very separate
issues and should not be thrown together. Crisis theory must be
modified depending on the level of analysis. Thus in the stage of
Theory of a Purely Capitalist Society 71

imperialism, part of the function that crisis performs for pure


capitalism is performed by imperialist war. Crises in the stages of
mercantilism, liberalism and imperialism are different, and at the
level of historical analysis a particular crisis may display all sorts
of peculiarities. 70
If the contemporary economy is becoming de-commodified,
then to that extent it represents capitalism in a state of dissolu-
tion. Of course closely connected to this de-commodification is
the growing manipulation of the economy by monopolies and the
state. The current crisis cannot be grasped as a direct manifesta-
tion of the theory of crisis embedded in the theory of a purely
capitalist society. Pure theory can provide an orientation and
clues about what to look at, but a great deal of historical and
conjunctural material is necessary to understand our present
crisis. Furthermore, given the extent of political manipulation of
contemporary economic life, any theory that purports to explain
the current crisis in purely economic terms must be inadequate.

10 CONCLUSION

Over much of its history Marxian thought has suffered from an


economism that is too ready to reduce the complexity of capitalist
history and social life to being a direct function of the law of
value. In recent years the reaction against this tendency has made
Marxist theorists in the West too ready to abandon the objective
guide that the law of value offers to our research and strategy.
This combined with a veritable renaissance of Marxian social
science has created a situation where Marxist studies have a great
deal of sail but little rudder. Much of the energy being devoted to
Marxist studies is being dispersed without the theoretical effec-
tiveness that it might have precisely because the theoretical
infrastructure of Marxian social science is weak and as a result
eclecticism is rampant. This also means that Marxian social
science lacks a clear and definite identity that would distinguish it
from other approaches. We can certainly see these tendencies at
work with the Sraffian Marxists.
In this chapter, I have attempted to give the reader an
indication of the reconstruction of the law of value offered by
Uno and Sekine. In my view Sekine's Dialectic of Capital is an
impressive theory and this is achieved primarily because Sekine
72 Political Economy

has fully exposed the dialectical logic embedded in Marx's and


then in Uno's theory of value. In future chapters I shall indicate
how it is possible for the theory of a purely capitalist society to
serve as the objective foundation for Marxian social science
without falling into the errors of economism and reductionism. It
is the levels of analysis approach that makes this possible, and in
what follows I shall develop this approach in at least outline form.
4 Stage Theory
The foundation of the Uno School is Uno's theory of a purely
capitalist society. It is this theory that sets forth the necessary
inner connections of capitalism in the abstract and in general, and
hence establishes the foundation of political economy. The
distance between the inner logic of capitalism and its historical
development is great. To apply the law of value directly to history
would therefore produce an economistic and reductionist history.
The gap between the highly abstract theory of pure capitalism
and concrete history must be addressed by developing media-
tions. There are many ways of doing this, but in Uno's view the
most effective way is to develop a distinct level of theory.
Following Lenin, Uno refers to this mediating level of theory as
'stage theory'.
Uno did not write a great deal on stage theory, nor has the
Japanese Uno School as a whole. 1 There are many unresolved
methodological issues about precisely how stage theory should be
formulated and how it relates to both pure theory and historical
analysis. I have attempted to outline an approach to stage theory.
What is important, however, is not my particular version of stage
theory, but the general principle that some sort of stage theory is
required and that its construction should be guided by the theory
of a purely capitalist society and history. Unfortunately the
writings of the Japanese Uno School that deal with stage theory
have not been translated into English. I therefore offer this
outline of stage theory in English as a first attempt which will be
improved on by others. What is especially needed to develop stage
theory is its use to help understand the history of capitalism. It
will then become increasingly clear what the logical status of stage
theory is.
In this chapter I shall first elaborate on the general principles of
stage theory based on the work of Uno and Sekine. Next, I shall
consider the stage of imperialism through a critical analysis of
some of the classical works and recent efforts at theorizing
73
74 Political Economy

imperialism. I shall conclude by reiterating the guidelines for


constructing effective stage theory while noting issues that are
controversial.

I THE THEORY OF PURE CAPITALISM AND STAGE


THEORY

The theory of a purely capitalist society completely exposes the


law of value because it allows the commodification of socioecon-
omic life to complete itself. But this assumes ideal use-values that
the motion of value can completely subsume and manage
capitalistically. 'A capitalistically produced commodity is re-
producible and hence can, in principle, be supplied in any
quantity. It is widely and frequently traded in an impersonal
market in which a large number of unidentified sellers face a large
number of unidentified buyers. ,2 Further, a capitalistically
produced commodity should be producible by a combination of
machines and commodified labour-power in a factory or factory-
like industrial process. This is really a corollary to the previous
statement since it is precisely the industrial organization of the
labour and production process that enables capital to supply a
use-value in any quantity in response to the market. A use-value
such as a shirt fits these requirements perfectly and hence may be
considered an 'ideal' use-value. Other types of use-values may not
be so capitalistically manageable. For example, consider grapes
grown for vintage wine. Only certain soils and climates can grow
such a commodity; the success of each crop is very dependent on
the weather; the growing season cannot be significantly shorten-
ed by technological advances as can the production process of
other commodities; a great deal oflabour is needed for the harvest
but at other times little labour is needed (unlike the steady supply
oflabour-power required by an industrial factory); and finally the
fragility of the commodity limits the effective application of
machinery. In this case, then, the use-value is rather difficult to
manage capitalistically.
Agricultural commodities are generally difficult to manage
capitalistically and this is one reason why petty commodity
production has generally prevailed in agriculture, even in the
most fully developed capitalist economies. The general reason for
this is that ideal commodities must be producible by capital
Stage Theory 75

concerned only with quantitative value criteria. Where use-value


and qualitative factors impinge, the motion of value is interfered
with. In a purely capitalist society, even though landed property is
an alien element, it is subsumed to the motion of value through
the category 'rent'. But the dialectic of capital demonstrates that
the relation between industrial-capital and landed property is
tenuous because landlords may interfere with accumulation by
charging monopoly rents. Furthermore, the existence of a
separate landlord class collecting rent discourages industrial-
capital from improving the productivity of the land by sinking
fixed capital into it. Finally there is a strong tie binding farmers to
the soil and this is a further qualitative factor that blocks the
operation of the commodity-form. In short these qualitative or
use-value obstacles make agricultural production far less flexible
than industrial capitalism where capital can in principle move
entirely in response to quantitative criteria. If flexibility is
essential to the operation of value, then farms must be expanded,
contracted or shut down in response to market forces. But this
situation seldom exists. In fact industrial agriculture first de-
veloped on a large scale in the Third World under conditions of
monopoly and primitive accumulation, that is under conditions
that are not very capitalist.
Marx himself was only partially aware of the obstacles in the
way of developing agrarian capitalism. 3 But if the law of value
never directly regulates agricultural production to any significant
extent, that does not mean that capitalism does not have a very
large impact on it. The point that I want to emphasize in this
discussion is the necessary tension between capitalist production
and agrarian production because of the use-value characteristics
of agricultural production.
If the motion of value has difficulty subsuming agriculture at a
historical level, it also has difficulty subsuming other types of use-
value production, not to mention services. Many of the fine arts
seem to be inherently petty commodity production under capital-
ism. A large part of the price of a Van Gogh painting derives from
the fact that it is produced by this particular individual. More
interesting because more central to our modem economy are use-
values such as spaceships, battleships or thermonuclear weapons.
Clearly such products do not fit the criteria of being commodities
since they are not supplied in any quantity for an impersonal
market and hence do not fall under the regulation of the law of
76 Political Economy

value. Here use-value overwhelms value. These examples show


that not all commodities are equally manageable capitalistically.
One could give other examples such as telephone systems,
hydroelectric systems and other 'natural monopolies'.
Capitalism is a historically limited mode of production because
the law of value can only subsume a limited range of use-value
production. Value must be impersonal and only concerned with
quantitative criteria; where personal or qualitative constraints are
important, value has difficulty operating. The motion of value
has difficulty subsuming agriculture or other areas of production
where the qualitative aspects of nature loom large. It cannot fully
subsume services because they are interpersonal. It can only
partially subsume large and complex social products especially
when they are only produced in a limited quantity for specific
buyers. Capitalism only achieves a partial grasp on historical
reality because of these difficulties that value has in managing
purely according to commodity-economic principles the produc-
tion of the use-values and associated technologies outside of a
certain range. The more that an actual economy is made of ideal
use-values such as shirts, pencils, bread and candles - i.e.
commodities that can be produced in any quantity and are
frequently traded in an impersonal market consisting of large
numbers of buyers and sellers - the more the law of value can hold
sway and the closer the economy approaches pure capitalism. As
I have already mentioned, a purely capitalist society is entirely
made up of ideal use-values in the sense that we let value
overcome all use-value obstacles so that commodification be-
comes complete. Although this enables us to formulate the law of
value as a set of necessary relations, it leaves us with a pure theory
of an impure world. The question then becomes how to develop
appropriate mediations so that the theory of pure capitalism can
help to understand history where capitalism is always impure?
When we look at pure theory we see that the basic contradic-
tion of the dialectic is between value and use-value, and that the
law of value can only emerge fully when value is allowed to
subsume use-value. But my previous analysis has shown that this
requires ideal use-values, and that when considered concretely all
use-values are not equally subsumable to the motion of value.
That the motion of value has only limited success in taming use-
values explains the limited grasp that capitalism has on history
(i.e. historical capitalism never becomes pure). That value can
Stage Theory 77

successfully manage only a limited range of use-values explains


the limited duration of capital's passage on this planet (i.e.
capitalism only holds sway over a limited period of history). The
demarcation of the capitalist epoch as a whole as well as of the
stages of development within it should be based on the degree to
which and the ways in which the motion of value subsumes use-
value production.
In developing stage theory we need to look for the type or types
of use-value production which are most representative of how
capital accumulates for that particular stage of capitalist develop-
ment. 4 According to Uno and Sekine, British wool manufactur-
ing is most characteristic of the stage of mercantilism (roughly
1650-1755), British cotton manufacturing of the stage of liberal-
ism (roughly 1775-1875) and German steel manufacturing of
the stage of imperialism (roughly 1875-1917). Uno and Sekine
see the periods before 1650 and after 1917 as phases of transition.
The law of value is active in all three stages of capitalist
development, but in the stage of mercantilism it only has a very
minimal grasp on economic reality. It is latent as opposed to
being manifest. Here the motion of value does not directly control
the labour and production process as in the case of industrial-
capital, but rather the motion of value in the form of merchant-
capital partially and indirectly subsumes production through a
putting-out system of cottage workers. In this mode of capital
accumulation the law of value is not manifest. Nevertheless since
this putting-out system represents a world-historic movement
towards industrial capitalism, it is already latent in this stage. The
law of value is most manifest in the stage ofliberalism because the
dominant type of production is the sort oflight manufacturing of
use-values that are closest to the ideal use-values of a purely
capitalist society. In the stage of imperialism dominance of the
law of value is weakened as heavy industry requires the develop-
ment of monopoly and state intervention that systematically
distorts its operation.
The law of value represents the inner law of the capitalist mode
of production, in the sense that it represents a purely capitalist
society where the completion of reification means that the law of
value is totally self-regulating and is not interfered with by any
outside other. But as we move towards history, this inner law,
which assumes ideal use-values, must now be modified in the light
of the concrete imperatives of actual modes of capital accumula-
78 Political Economy

tion. This is what I mean when I say that stage theory is the
'extemalization' or 'concretization' in history of the basic value/
use-value contradiction of the dialectic of a purely capitalist
society. This basic contradiction is conretized in a dominant
mode of accumulation, which includes all aspects of the dominant
form of capital accumulation.
Stage theory is a distinct level of analysis arrived at neither by a
deduction from pure theory nor by an abstraction from history.
The concepts of stage theory are essentially abstract 'material-
types' arrived at by using pure theory and history to help
determine the main structures and processes of the dominant
mode of capital accumulation in that historical stage. 5 Stage
theory is essentially static since it aims to grasp the dominant type
of capital accumulation and not actual historical change and
development. The analysis of history constitutes a third level of
analysis where agency and contingency operate within the general
constraints ofthe stage-theoretic dominant type of accumulation.
At the level of historical analysis we see to what extent and in
what ways the dominant type of capital accumulation impacts on
the world where capitalism always develops very unevenly.
Actual historical change, including the transition between stages,
must be analysed at the level of historical analysis, albeit
historical analysis guided by stage theory and pure theory.
A stage implies some coherence to the law of value in the sense
of a dominant type of use-value production and corresponding
organization of value expansion to produce a mode of accumula-
tion. In other words a stage implies a dominant type of capital
accumulation that has internal integrity and coherency and that
can be essentially understood as a self-expansion of value which is
only secondarily dependent on outside forces, such as the state.
The stage of mercantilism represents the first halting appearance
ofthe law of value as a subsumption of the labour and production
process to the motion of value in a putting-out system. The stage
of liberalism represents the maturity of the law of value as it
secures the commodification of labour-power and develops
factory production. The stage of imperialism represents capital-
ism in decay as the development of monopoly and state interven-
tion begins to undermine the market. I use 'phase of transition' to
demarcate the period before mercantilism and after imperialism.
A phase of transition as a transition away from feudalism or
away from capitalism must be theorized differently from stage
Stage Theory 79

theory. In the case of the transition away from capitalism, the law
of value can no longer be applied to arrive at a dominant form of
capital, but rather we must carry out our analysis at a historical
level, and we must understand history as an unravelling or
disintegration of the law of value. The law of value is still useful as
a reference-point for understanding what it is we are moving
away from, but a phase of transition does not have the same sort
of inner logic based on the law of value that a stage has. This does
not mean that in the transition away from capitalism anything is
acceptable, only that the law of value increasingly does not apply
and that therefore the world must be understood primarily in
terms of socioeconomic forces and power relations and not in
terms of value theory. It is still possible to try to determine the
tendencies manifested in relations between persistent structures,
but it is not possible to understand these structures as manifesta-
tions of the law of value. Instead we need to understand structural
developments as a movement away from or as a historically
specific case of the unravelling of the law of value. Both the law of
value and the theory of the imperialist stage serve to guide the
analysis of the phase of transition away from capitalism.
Since in pure capitalism, society is governed by a self-regulating
market, the state and ideology can only be conceived of as
embryonic forms lacking materiality and interventionist
capability. Furthermore, a purely capitalist society has no
geographic or territorial location, but must be assumed to be a
global society without boundaries and without foreign trade. But
in history capital always develops within and between territorial
states, and the development of capital and of the nation-state are
up to a point mutually supporting. Also capital develops very
unevenly when viewed spatially on a global scale. So in construct-
ing stage theory we look for the form or forms of use-value
production that most characterize the stage, forms that are
always located in a particular territorial state and are supported
by state policies. This is because when the total reification of pure
capitalism no longer holds, then capital cannot do without the
support of the political and ideological superstructure. Thus at
the level of stage theory, we look for the dominant form of
capitalist accumulation, we look for its geographical location and
we look for the types of ideology and state policy that support it.
Knowledge of the inner logic of capital achieved at the level of
pure theory helps to interpret the historical material in construct-
80 Political Economy

ing a stage theory, but stage theory is in no sense a deduction from


pure theory. Rather, stage theory represents an extemalization of
pure theory, such that the use-value obstacles become more
concrete and historical as do the motions of value in overcoming
these obstacles. In its more concrete mode of organization and
operation, value as capital is no longer self-supporting, but
instead requires the support of determinant ideologies and state
policies. Stage theory is no longer a purely economic theory.
Transitional phases must be analysed at an historical level of
analysis where the political and ideological are even more
integrated with the economic or where the economic has less of a
logic of its own.

2 MERCANTILISM, LIBERALISM, IMPERIALISM

In this section my purpose is to outline briefly the stages of


capitalist development according to the approach of Uno and
Sekine. I shall do this in a descriptive fashion without much
reflection on the methodology employed since I will deal with this
in the next section. Only the theory of the imperialist stage will be
developed to any extent, and that will be done in later sections
through a critical analysis of both classical and recent literature
on capitalist development in the late nineteenth and twentieth
centuries. This section, then, will outline the stages of mercantil-
ism, liberalism and imperialism; and it will also discuss the
problem of theorizing the period from 1917 to the present which I
view as a phase of transition away from capitalism.
Mercantilism refers to the early development of capitalism in
the seventeenth and eighteenth centuries. It is British capital that
becomes predominant in this stage so that it is to Britain that we
should tum in looking for the dominant form of use-value
production. According to Uno, it is British wool production in
particular that represents the form of use-value production most
characteristic of this stage. Why wool rather than coal or iron, or
why a type of use-value production as opposed to the triangular
trade that initially involved slaves and sugar? The answer to these
questions comes from combining the knowledge of precisely what
capitalism is ~nd how it operates with historical knowledge. We
know that capitalism is essentially the commodity-economic
operation of the labour and production process and that this
Stage Theory 81

depends crucially on the commodification of labour-power. In


this stage of capitalist development merchant-capital is dominant
and labour-power has not yet become substantially commodified,
but in fully developed capitalism the circulation of value, here
represented by merchant-capital, comes to dominate the produc-
tion process. So we look for a type of use-value production that
represents substantial inroads on the agrarian base of pre-
capitalism and that represents a significant step towards the
capitalist management of the production process. British wool
production is precisely such a form of use-value production.
Merchant-capital organized wool production as a putting-out
system. The growth of wool production made the raising of sheep
more profitable and this stimulated the enclosure movement
which separated the direct producer from the land. The cottage
spinning and weaving of wool began to separate manufacture
from agriculture, and the putting-out system was a major step
towards capital's gaining control of the production process. The
expropriation of the agricultural producer which was the basis of
the gradual commodification oflabour-power was 'accomplished
in concerto by the establishment of the wool industry as indepen-
dent of, rather than directly subordinate to, agriculture'.6 The
domestic handicraft production of woollen articles organized as
'a putting out system by merchant capital interested in inter-
national trade typifies the industrial activity of this stage'. 7 The
dominant form of capital in the mercantilist stage is merchant-
capital, and merchant-capital accumulates by organizing man-
ufacturing as a putting-out system that gradually becomes
separated from agriculture and is subordinated to international
trade. Wool production is the type of use-value production that is
most characteristic of the activities of merchant-capital in so far
as it directly lays the foundations for the development of
capitalism. This mode of accumulation was supported by the
mercantilist policies of the absolute/constitutional monarchy
which chartered trading companies and adopted policies such as
the Navigation Acts and Com Laws which directly supported
merchant-capital. Mercantilism is the economic policy of the
monarchy as it enforces the primitive accumulation of merchant-
capital. Most crucial to this process of primitive accumulation is
the separation of the direct producer from the land and the
separation of manufacture from agriculture, for it is these
processes that lay the foundations for the commodification of
82 Political Economy

labour-power. This first stage of the birth and infancy of


capitalism is appropriately called 'mercantilism', and it is English
wool production organized by merchant-capital that most re-
presents the evolution of the capitalist method of production in
this stage.
The triangular trade may have lead to the accumulation of
great fortunes, but this was essentially a system of unequal
exchanges that did not involve merchant-capital in subsuming the
domestic production process in the way the putting-out system
did, nor did it involve merchant-capital directly in social pro-
cesses leading to the commodification oflabour-power. Perhaps a
case could be made for some other use-value such as coal, but coal
production seems minor in comparison with wool and involves
various forms of impressed labour (at least in its earlier stages). It
is not so directly tied in with the large socioeconomic processes
that lead to the commodification of labour-power and the
eventual subsumption of the production process by capital, nor
does it play so important a role in foreign trade and in the growing
national economy. In any case the important point here is not to
insist on wool as the most characteristic form of capitalist
production in the stage of mercantilism, but to show that the
dominant type of use-value selected depends both on our
knowledge of the law of value and on our grasp of capitalist
history.
The stage of mercantilism represents an externalization of the
law of value in a situation where labour-power is not yet
substantially commodified and where the production process is
only indirectly and partially controlled by capital through a
putting-out system. But this means that the law of value can only
manifest itself in the most embryonic and minimal ways, and to a
large extent it is not manifest but is only latent in this stage. This is
still primitive accumulation that depends substantially upon
extra-economic force and various types of plunder and direct 'rip-
off. However, the beginnings of the law of value can be seen in
profit-making based on the exploitation of labour, not through
the wage-form but through a system of selling raw wool at a high
price to the cottage weavers and buying back the finished cloth
cheaply. This was possible because of the monopolistic position
of the merchants who were price-makers vis-a-vis the cottage
weavers who were price-takers. Of course, the exploitation of the
cottage weavers was limited by the need to keep a sufficient
number alive to do the weaving.
Stage Theory 83

Liberalism, the second stage in the development of capitalism,


is firmly established through the industrial revolution that results
in factory production and the securing of the reproduction of
labour-power as a commodity.8 According to Uno, the most
representative form of use-value production in this stage is
English cotton manufacturing, and the form of capital that most
successfully operates this sort of light manufacturing of consumer
commodities is industrial-capital. With industrial-capital we see
the fullest development of a competitive, market-governed econ-
omy and along with it the periodic crisis. This mode of capital
accumulation is supported by economic policies aimed at over-
coming restrictive practices in favour of free trade. This is the
stage of classical liberalism with ideas such as laissez-faire or 'the
least government is the best government' increasingly reflecting
faith in the market to regulate the economy in an optimum
fashion. The stage of liberalism with its laissez-faire tendencies
most closely approximates pure capitalism, since in a purely
capitalist society the total regulation of real economic life by the
market means the disappearance of state economic policies. Total
reification or pure capitalism is of course never closely approx-
imated at the level of concrete history, but still it is approached
most closely in the industrial capitalism of mid-nineteenth-cen-
tury England. Thus according to Uno and Sekine capitalism
reached its fullest maturity in mid-nineteenth-century England.
In summary, the typical form of use-value production of the
liberal stage is cotton manufacturing; the dominant form of
capital is competitive industrial-capital; its political location is
Britain; and the dominant state economic policies and ideologies
revolve around free-trade liberalism.
Because the stage of liberalism is closest to a purely capitalist
society it is possible to assume mistakenly that pure theory is
simply abstracted from this stage or that this stage somehow
represents a varification of pure theory. The liberal stage is closest
to pure theory because the sort of light manufacturing represen-
ted by cotton manufacturing is closest to the ideal use-values
assumed by pure theory. Thus the dominant type of use-value
production in this stage is the most conducive to pure theory
because it is closest to the ideal use-values needed for the purely
competitive market of pure capitalism. But it must be emphasized
that at the level of stage theory these use-values are not
considered ideal and abstract, and hence active support by the
superstructure is necessary. Thus there is an active state during
84 Political Economy

the stage of liberalism, only the dominant type of capital


accumulation makes it more and more possible for this state to
adopt free-trade and laissez-faire policies. Also a note of caution
needs to be added that stage theory is still quite abstract and only
aims to grasp the dominant type of capital accumulation as an
abstract material type. Even at the height of this stage in Britain in
the 1860s, significant parts of the economy were not even
capitalist, or if capitalist, not necessarily the competitive indus-
trial capitalism represented by cotton manufacturing. I will
expand further on these points later in the chapter when I give
examples of how to use stage theory. The point I want to
emphasize here is that there is a great distance between the theory
of the liberal stage and pure theory, because it is a distinct and
more concrete level of analysis, and that cotton manufacturing is
a concrete form of use-value production even though as a type it is
closest to the type of ideal use-value production required by pure
theory.
The reign of this form of use-value production came to an end
in the late nineteenth century with the development of heavy
industry and the Great Depression. The most characteristic type
of use-value production then became iron and stee1. 9 The
economies of scale associated with large fixed capital investments
in steel production required the long-term mobilization of large
amounts of capital and credit. The development of the limited-
liability joint-stock company accompanied by the development of
the banking system facilitated the rapid centralization of capital
in the late nineteenth century. Large banks became very interes-
ted in the operations of heavy industry since the banks committed
large amounts of credit to the fixed capital investments of heavy
industry. The resulting merging of industrial-capital and bank-
ing-capital is referred to as 'finance-capital'.
Finance-capital creates various types of monopolistic organ-
ization so as to protect its investments from the vagaries of the
market. The result is chronic excess capacity which stimulates
aggressive expansionism. The state economic policies neces-
sitated by finance-capital are protectionism at home and aggres-
sive expansionism abroad. The protectionism is needed to protect
high monopoly prices from international competition in the
domestic market, and expansion is needed to take up the slack of
chronic excess capital relative to the home market. The develop-
ment of ~onopoly and the consequent declining capacity of the
Stage Theory 85

market mechanism successfully to regulate the economy neces-


sitates more aggressive and interventionist policies on the part of
the state in order to support the operations of finance-capital.
Typical policies involve dumping and tariff wars, aggressive
colonial policies and a 'sozia/politik' (welfare state) which de-
velops to stem the socialist menace and secure the reproduction of
labour-power as a commodity. 10 All of this results in a rapid and
large growth in the scope of state activities and in the public
expenditures needed to support these activities. Taken together
the state economic policies of finance-capital are referred to as
'imperialism'. .
According to Uno and Sekine the German steel industry is the
material-type most representative of finance-capital. Perhaps a
case could be made for the American steel industry, but I do not
want to enter this debate. The point is to derive stage theory from
the dominant and most classical example of a type of capital
accumulation associated with a type of use-value production.
Everyone would agree that the paradigm case of finance-capital is
not any kind of British use-value production; and yet Britain was
the dominant (though declining) world economic power in this
stage. The fact that the dominant type of capital accumulation
does not reach its classical form in the dominant world economic
power is no doubt one reason why this stage of capitalism is
rather more short-lived than the others.
The first successful socialist revolution in 1917 marks the
world-historic start of the transition away from capitalism. In this
phase a dominant form of capital accumulation based on
externalizing the law of value can no longer be constructed. We
cannot, therefore, construct stage theory, but instead must
develop historical theory based upon a unravelling of the law of
value. Whereas in the stage of imperialism, state interventions
were mostly limited to influencing market forces, now state
intervention increasingly substitutes for the market, blocks
market forces and manipulates the market. II Markets in land,
labour, capital and money become manipulated and less re-
gulated by commodity-economic principles.
Referring to the period from 1917 to the present as a
transitional phase does not mean that exploitation or the
production for profit cease, but only that the structural dynamics
of economic life can less and less be understood by the law of
value. The law of value loses its inner coherence as the market is
86 Political Economy

undermined by monopoly and by the state. Theorizing this period


as a transitional phase rather than a capitalist stage proper is very
important if we are to understand the character ofthe period and
theorize it correctly. It is necessary to understand both that the
law of value has failed and why it has done so in order to
understand the statified economies that have developed. It is
necessary to see that this is a transitional stage in which
increasingly the world is becoming socialist, albeit at first with
often rather primitive forms of socialism. The world-historic
failure of the law of value must be fully grasped if the Left is
effectively to criticize the tragically inappropriate 'free enterprise'
ideologies still put forward by some of the most powerful
economic powers.
The transitional phase from 1917 to the present can be divided
roughly into two periods: the inter-war period and the post-
World War II period. In the inter-war period the aim was to re-
establish finance-capital and the gold standard; the result was
depression, fascism and eventually World War II. The post-
World War II period was based on an American-dominated
international monetary system and American international
policies aimed at keeping as much of the world open to American
investment as possible. This was combined with quasi-Keynesian
policies domestically and the internationalization of production.
Some of the contradictions of this system are now becoming all
too manifest, as the world teeters on the brink of financial crisis
and governments everywhere begin to adopt wrenching austerity
policies.
This view of twentieth-century capitalism has very important
theoretical consequences. It is all right to speak of the dominant
world economy in the 1980s as 'capitalist' if we are speaking
loosely, but in our theorizing this might lull us into using
inappropriate categories since we need to understand the senses in
which the current conjuncture is not capitalist or is disintegrating
capitalism that is in the process of becoming something else. For
example, in the approach I am advocating fascism is not a
capitalist superstructural form but a transitional form in the sense
that it develops in the world-historic phase of transition away
from capitalism. The transitional character of our age helps us to
understand both the potentialities and dangers that we face. I
have intentionally used 'transition away from capitalism' and not
'transition to socialism' since I think other outcomes than
Stage Theory 87

socialism are possible. The only way that we can achieve


socialism, and its achievement is a real possibility, is radically to
democratize the societies we live in, but I do not think anyone will
claim at this juncture that this will be an easy task.

3 THE LOGICAL STATUS OF STAGE THEORY

It should be clear from the preceding argument that stage theory


is a disctinct level of analysis that cannot be directly deduced from
pure theory but involves the concretization of pure theory in a
historical epoch. If stage theory is not deduced from pure theory,
neither is it abstracted from historical data. It may appear at first
glance that 'merchant-capital', 'industrial-capital' and 'finance-
capital' are Weberian ideal-types. I want to emphasize their
differences by referring to the type concepts of stage theory as
'material-types' as opposed to 'ideal-types' or 'average-types'. Let
me start by exploring the contrast between ideal-type and
material-type. 12
Take Weber's ideal-type 'charismatic domination' and com-
pare it with the material-type 'finance-capital'. 'Charismatic
domination' is constructed by a process of selective abstraction
that eventually arrives at an extreme case which represents the
most purified and abstract picture of a type of domination in
contrast with other types of domination. The pure type of
charismatic domination may never exist and in this sense it is a
'utopia', but real examples of domination may be sorted out
according to whether they manifest charismatic domination to a
greater or lesser degree. Such a concept is subjective in the sense
that the knowing subject uses imagination and abstraction to
create an extreme-type for the sake of highlighting and emphasiz-
ing some aspect of empirical reality. An indefinite number of
ideal-types can be generated given the emphases placed upon
reality and given the particular point of view and interests of the
knowing subject. Not only is subjective imagination used in
constructing the ideal-type but also it is used in applying it, as in
the case of trying to figure out to what extent and in what ways the
domination of President Ronald Reagan is charismatic.
The material-type concept 'finance-capital' is very different
from the above description of a Weberian ideal-type. It is arrived
at by concretizing the basic contradiction of the dialectic of
88 Political Economy

capital between value and use-values. We look for the type of use-
value production that is most characteristic and dominant in each
stage and abstract from that our material-type concept. Thus
German steel production most represents the dominant form of
production in the stage of imperialism. In order to be capitalis-
tically managed, mass production of steel requires that value
organize itself in the form oflimited-liability joint-stock corpora-
tions. The massive long-term fixed capital investments of heavy
industry require the mobilization and centralization of society's
saving and lending power, and hence the merging of banking-
capital with industrial-capital to form finance-capital. Thus
though 'finance-capital' is an abstraction it is an abstraction
based upon a material-type of production which is in fact
dominant in a particular stage of capitalist development. The
dialectic of capital gives us an objective grounding so that our
task is limited to finding the ways in which the dialectic
concretizes itself. According to Weber's three-fold typology of
domination, any empirical example of domination must involve a
mix of charismatic, traditional and legal-rational domination.
But I am not saying that any empirical case of capitalist
production must be a mix of merchant-, industrial- and finance-
capital; rather I am saying that these types of capital succeed one
another in being historically dominant and that they have a
determinant relationship both to the dialectic of capital and to
history.
In summary, then, it is my contention that: first, unlike an
ideal-type, a material-type does exist, and is not a one-sided
utopia constructed for analytic purposes. Second, there is not an
unlimited number of material-types, but only one that serves as
the paradigm case. Third, the material-type is not transhistorical
but instead is hegemonic only in a specific stage of capitalist
development. Fourth, the construction of a material-type is
guided by the objective reference-point of the dialectic of capital
and not by a particular emphasis desired by the knowing subject.
'Finance-capital' is a pure-type concept in the sense that the
historical reality of finance-capital always involves local
peculiarities. Although German steel may be the purest example,
in its empirical concreteness it involves its own peculiar details
and irrelevant contingencies. So we theorize the German steel
industry as a type of organization and operation of capitalist
accumulation and not as a detailed descriptive history. Thus
Stage Theory 89

though finance-capital really does tend to dominate the stage of


imperialism, its concrete working in France, Britain and the
United States is bound to display considerable diversity.
It is important to emphasize that I do not arrive at the concept
of finance-capital by abstracting from Germany, the United
States, France and Britain to see what they all have in common in
this stage. Such an approach is empiricist and does not produce
an ideal-type or a material-type but rather an average-type. If the
concept 'finance-capital' is an average-type abstracted from these
'four pillars of world finance capital', then we must abstract from
their differences and find what they all have in common. \3 It may
tum out that protective tariffs play a much bigger role in
Germany than in Britain so that the protectionism falls away
from our concept of finance-capital. Or it may be that banks play
a bigger role in Germany than in the United States, so the role of
banks must be made secondary. The stock-market may playa
bigger role in the United States than in Germany, thus either
making it secondary or requiring some more abstract concept
that would combine both banks and stock-markets. What do
France, Germany, Britain and the United States all have in
common? The answer is monopoly. An average-type analysis
produces an overly abstract concept that does not bring out the
interplay of political policy and capital accumulation in its
dominant form. Because political policies are likely to be different
between nations, this dimension is likely to precipitate out so that
the conception ends up being not only overly abstract but also
economistic. The Uno/Sekine approach enables us to see why
finance-capital developed later and less completely in Britain and
France, so that we do not allow these cases to water down our
abstraction based on the purer German case.
The material-type concepts of stage theory are based on a
dialectical approach in contrast to the abstract impressionism of
empiricist average-types or of Weberian ideal-types. Material-
type concepts theorize the type of capital that is actually
dominant in each stage of capitalist development, and thereby
represent the extemalization of the dialectic of capital in history.
They are not mental constructs or analytic models with indeter-
minant relations to empirical reality, rather they display a
determinant relationship between the inner logic of capital and its
historical development.
The sequence of categories in the dialectic of capital is a
90 Political Economy

necessary sequence and this necessity derives from the overcom-


ing of use-value obstacles by value in its effort to subsume an
entire economic society to its motion. One necessary component
of the dialectic of capital is periodic crisis, but this necessity is
different from the necessity of imperialist war that emerges from
the stage theory of imperialism. This is because the sequence of
stages represented by the production of wool, cotton and steel is
not a necessary sequence in the sense that we cannot show that the
dialectic of capital must be externalized in these and only in these
dominant types. It is true that capitalism has a tendency to
produce more complex and more socialized use-values as it
develops, and that these use-values are less and less amenable to
being managed purely by the motion of value. Capitalism
therefore has a limited life span, limited by a historical range of
use-values that it can manage. Outside this range large chunks of
use-value production begin to escape its grasp. With the develop-
ment of heavy industry, which is the underlying material reality of
the stage of imperialism, we already see a distinct weakening of
the law of value. Thus although capitalism necessarily has a
limited life span, it is not possible to show that the life span must
take exactly the form that it does through the three stages. In
other words the stage of imperialism cannot be deduced from
pure theory because the historical environment in which it is
externalized includes elements that are contingently given outside
the operation of the law of value. But once these elements are
given, we can say that the law of value will tend to operate in a
particular way. Given the stage of imperialism, imperialist wars
are a necessary outcome, but this stage itself cannot be shown to
be necessary because it in part rests upon contingent givens (e.g.
heavy industry and certain technological inventions). Therefore
the necessity for imperialist wars in the stage of imperialism is a
weaker necessity than the necessity for periodic crisis in a purely
capitalist society, because it is a necessity based on a state of
affairs that is itself based in part on contingent givens. To mark
this difference it is perhaps more accurate to say that in the stage
of imperialism strong pressures are created that make imperialist
war a likely outcome.

4 APPLICATIONS OF STAGE THEORY

What I mean by 'stage theory' will become clearer if I examine


Stage Theory 91

some possible uses of it to clarify controversial issues concerning


crisis theory and class struggle. Further applications of stage
theory will be developed in later chapters.
First, I shall look at the question of crisis theory. At the level of
pure theory I argued that crises arise first from the difficulties of
maintaining the commodification of labour-power and second
from the commodification of fixed capital. Capitalist crisis is
rooted in the alternating widening and deepening phases of
accumulation, and the result of crises is to restructure the basic
capital-labour value relation on a new basis that permits another
round of expansion. Crises force capital to renew its technological
base and to replenish the reservoir of surplus population. But all
of this assumes the total reification and complete commodifica-
tion of a purely capitalist society. At the more concrete level of
stage theory crisis will take different forms depending on the
dominant type of capital accumulation. Because the dominant
type of use-value production in the stage ofliberalism is closest to
the ideal use-values of pure theory, we would expect crises in
Britain in this stage to conform most closely to the periodic crises
of a purely capitalist society.14
In the stage of mercantilism crises are another matter
altogether. Neither labour-power nor fixed capital are yet
extensively commodified so that crises would not be generated by
the logic of the law of value. Crises in this case are generated by
external factors (external to the law of value) or by the extremely
imperfect working of the law of value. Crises would likely be
produced by sudden price changes due to speculation, new
discoveries, new markets, monopolistic price manipulation,
political price manipulation or by class struggle in the form of
popular resistance to price changes or to the commodification of
labour-power. Thus we would not expect general periodic crises
in the stage of mercantilism but rather crisis of an occasional and
partial character associated with the growing pains of capitalism
in its early development.
This approach shows the need to reconsider the whole question
of capitalist crises in the stage of imperialism. Because of the size
and monpolistic character of firms in this stage, they have greater
capabilities to stave off full-blown crises and indeed such crises
become less and less tolerable the larger the units of capital.
Protectionist policies guard against international price competi-
tion, and aggressive expansionism and support for finance-
capital on the part of the state can forestall crises by exporting the
92 Political Economy

problems that give rise to them, or by shifting those problems


onto the non-cartellized sector or onto the backs of workers.
When crises do finally occur, recovery is likely to be slower
because cartellized industries will attempt to maintain high prices
even in the face ora depression and this of course makes recovery
much more difficult for non-cartellized industries, and creates a
situation of stagnation or prolonged depression. IS Even when
high cartel prices finally do collapse, the crises will not necessarily
bring about a renewed technological base and value proportion
which will ensure another round of expansion, and this is because
the health of the economy depends increasingly on aggressive
expansionism, protectionism and nationalism. But this requires a
strong state and aggressive imperialist policies, so crisis theory
can no longer be theorized in purely economic terms. In fact it is
precisely because crises in the imperialist stage can no longer
perform all the functions that they perform in a purely capitalist
society, and because each core state tries aggressively to export it
economic problems that imperialist wars become likely. Periodic
crises in the stage of imperialism cannot be theorized as a direct
expression of the law of value and cannot be theorized in purely
economic terms. Indeed the existence of finance-capital deflects
the law of value significantly in this case altering the nature of
crises and requiring significant state intervention. The partial
inffectiveness of periodic crises in this stage of capitalist develop-
ment must be considered a primary underlying cause for imperial-
ist war.
Next let me briefly consider the issue of class struggle from the
point of view of stage theory. In the stage of mercantilism, class
struggle cannot take the form of capital versus proletariat since
the proletariat does not yet exist in the putting-out system. What
is possible is the rebellion of cottage weavers against the prices.
that the merchants pay for their cloth, or a revolt of consumers in
general against high prices, for example, bread riots, or the
uprising of peasants uprooted by enclosures, or other reactions of
populations that are unsettled by primitive accumulation. These
resistances against the commodification of socioeconomic life
and particularly against the commodification of labour-power
may be seen as class struggles in embryo, but in reality the groups
in question, to speak strictly, are not capitalist classes and in part
their rebellion is against being made into a class - in particular
into a landless industrial proletariat. In the stage of mercantilism,
Stage Theory 93

the global expansion of capital generally relies upon slavery and


forced labour and this is because not enough people have yet been
pushed off the land to provide immigrant labour in the new
territories. Even in the core states capital only manages partially
to subsume the labour and production process through the
putting-out system, so that it is not surprising that in the new
territories pre-capitalist modes of forced labour are used.
This sort of struggle against being made into a class continues
well into the stage of liberalism, but in this stage the victory of
industrial capitalism and the commodification of labour-power
take place. With these events, the industrial proletariat becomes a
reality and we see the beginning of class-consciousness with
various movements putting forward demands that clearly re-
present the interests and the point of view of the industrial
proletariat. In the stage of liberalism we see the beginnings of
class struggle in its classical form - that is capital versus the
industrial proletariat.
In the stage of imperialism class struggle takes further new
forms. The cartellized sectors give rise to strong unions and a
socialist movement, while the existence of cartellized and non-
cartellized sectors stratifies the working-class. Furthermore, the
relation between centre and periphery creates a further stratifica-
tion with many colonial workers suffering the violence and
superexploitation of primitive accumulation. The growing power
of the working-class in the core states and the need of finance-
capital for a more stable labour force give rise to the beginnings of
the welfare state and to political parties in the modem sense. The
dangers of a growing socialist movement are offset by concessions
and by a nationalist and inter-imperialist rivalry that finally issues
in world war.
This analysis shows that strictly speaking capitalist classes do
not even exist (except possibly in embryo) in the stage of
mercantilism, and in the stage of imperialism class structure
becomes complex both within the core states and even more so
when viewed globally. The self-purifying tendency that takes
historical capitalism closer to pure capitalism in the stage of
liberalism is reversed in the stage of imperialism so that historical
capitalism begins to move away from further purification.
Starting with the stage of imperialism, there is no longer a
historical tendency towards two homogeneous and polarized
classes (of course there may be conjunctural tendencies towards
94 Political Economy

polarization). Class struggle is increasingly overlaid with national


struggles and struggles of particular strata and fractions within
classes or even intermediate strata between classes. In fact the
strong state required by the imperialist stage with its welfare state
policies is the beginning of the modem service sector with its
intermediate strata that have fuelled so much controversy within
Marxist discourse on class.

5 CLASSICAL THEORIES OF IMPERIALISM

Since stage theory was really born with the theory of imperialism
and since there is the most literature on this stage, I shall carry out
a critical analysis of some of this literature to develop further the
implications of the Uno/Sekine approach.
In his recent work The Geometry of Imperialism, Giovanni
Arrighi claims that the Marxian theory of imperialism has
become a 'tower of babel'.16 This no doubt overstates the
confusion, but it must be admitted that this particular body of
literature displays a considerable proliferation of approaches and
conceptual frameworks.
Classical theorists of imperialism such as Hilferding, Luxem-
burg, Lenin and Bukharin have often been analysed from a very
politically motivated point of view. Because Lenin lead a
successful socialist revolution, his text Imperialism: The Highest
Stage of Capitalism has been most preferred and most influential.
Because Luxemburg is often seen as a heroic and principled
fighter against opportunism her Accumulation of Capital is also
looked upon with favour. Hilferding's Finance Capital has often
been written off because after he wrote the book he became a
social democrat, so that interpreters look for the seeds of his
revisionism in his earlier theoretical work. I shall argue that
Hilferding's Finance Capital is the best of the classical works on
imperialism.
So far the Marxian theory of imperialism does not have a
clearly defined theoretical object or a theoretical approach with a
firm scientific grounding. Lacking basic epistemological clarity,
very often political or ideological criteria are substituted for
scientific criteria in the development of reasons to accept or reject
particular theories. Sometimes theories are accepted or rejected
because they are branded as Third Worldist, reformist, economist
Stage Theory 95

or Stalinist and not because they have been shown to be valid or


invalid, scientifically weak or strong. Some Marxists seem to
think that Marx's Capital is a storehouse of scientific categories
that can be borrowed free of charge. We find value categories
being used directly to explain the latest twist or tum of history or
to back up preconceived political positions. Unfortunately there
is insufficient understanding of the internal integrity of the theory
of capital, and of how its categories may best be used to help
understand history.
A further problem of interpretation has been the tendency to
apply these theories to post-World War II capitalism and to judge
them by their ability to theorize the current conjuncture. In order
to begin to clear away the confusion from the theory of
imperialism, it is necessary to reconsider the scientific adequacy
of these theories for the stage they were actually trying to theorize,
namely the stage that begins around 1870 and ends in 1917, and
then to determine their applicability to the current conjuncture.
And we need to evaluate the theories according to their scientific
adequacy and not according to the position of the author in the
pantheon of Marxist heros or villains.
Although Marx had some awareness that the theoretical object
of Capital was pure capitalism, he assumed that capitalism would
become more and more pure. The early signs of the development
of monopoly that he saw before his death in 1883 were interpreted
as introducing a phase of transition away from capitalism that
would rapidly be succeeded by socialismP Marx could not
foresee that finance-capital would, with the help of state policies,
establish itself as a stage of capitalist development. It was only
when the stage of imperialism was in decay with the advent of
World War I that Lenin could first conceptualize it as a distinct
stage of capitalist development.
Lenin correctly saw monopoly capitalism or imperialism as a
stage of capitalism, and though his five-point list of essential
features is a rough approximation, his pamphlet on imperialism
as a whole is not a work of science so much as a popular polemic.
Since Lenin's aims were primarily political and strategic, we
cannot expect him to produce a scientifically rigorous theory.
Lenin's recognition of stages of capitalist development is an
important theoretical contribution, but his inability to arrive at a
clear understanding of exactly what a stage is or of how the theory
of capital in general relates to the theory of stages has been
96 Political Economy

reproduced by all prior and subsequent Marxists in the Western


tradition. In general these two questions about the character of
the theoretical object and method of stage theory have not been
focused on with sufficient theoretical intensity, so that they have
either been ignored altogether or have been glossed over with
simplistic solutions.

HiHerding

Hilferding's Finance Capital, first published in 1910, is the most


theoretically sophisticated work dealing with imperialism. 18 Un-
fortunately this work has not been widely read, and it is the
popularizers Lenin and Bukharin who are read and studied. But
Lenin and Bukharin wrote polemical pamphlets on imperialism
and not serious theoretical works. Their pamphlets were largely
derivative and the greatest influence on both of them was
Hilferding. Hilferding's Finance Capital is an impressive
theoretical work, but it suffers from the logical-historical method
which prevailed in all the classical writings on imperialism.
Because Hilferding lacks a clear conception of pure capitalism
and the necessity for levels of analysis, he has a tendency to move
directly from the necessary inner connections of pure capitalism
to more concrete levels of analysis, thus mixing levels of analysis
that must be kept logically distinct. For example, he mixes the
theory of money in pure theory with monetary institutions that
are specific to the stage of imperialism and the theory of crisis in
pure theory with considerations of crisis in the stage of imperial-
ism. 19 Finance-capital is seen as the logical-historical outgrowth
of capitalist development so that no conception of stage is
necessary.20 In this fashion pure theory and stage theory are
collapsed together into a single logical-historical theory which
treats the necessity for World War I as no different from the
necessity for periodic capitalist crisis. Despite these theoretical
weaknesses, Hilferding does make impressive strides towards an
adequate conception of the dominant form of capital and
accompanying state economic policies for the imperialist stage of
capitalist development. Although his analysis of ideology and
state policy is more developed than in other classical works, still
this analysis is overly abbreviated.
Stage Theory 97

Hilferding does recognize the primacy of the iron and steel


industry to the stage of imperialism and seems to grasp intuitively
that Germany represents the purest type or most classical
example of finance-capital. However, he does not see the
importance of the dominant form of use-value production as the
link to the basic value/use-value contradiction of pure theory and
therefore as the basis of stage theory. Also he does not argue
systematically that the German case is the most typical, though he
provides fuel for such an argument by considering some of the
special and atypical characteristics of US finance-capital which
would be the most obvious competitor for being the classical type
of finance-capital. 21 It is because he intuitively focuses on the
German case that his conception of finance-capital is as accurate
as it is.
Unlike Bukharin and Luxemburg, Hilferding does not put
forward a theory of economic collapse. Hilferding believes that
imperialist war will 'unleash revolutionary storms'. 22 In this sense
imperialism will tend to sharpen class struggle and polarize
society. He also sees the 'tendency for finance capital to socialize
production as facilitating enormously the task of overcoming
capitalism'.23 And though he uses the word 'collapse', the whole
thrust of his argument is against an inevitable collapse. He makes
it clear that for the proletariat to benefit from these tendencies, it
must adopt a position of implacable opposition to the expansion-
ist and militarist policies of finance-capital:

... victory can come only from an unremitting struggle against


the policy, for only then will the proletariat be the beneficiary
of the collapse to which it must lead, a collapse which will be
political and social, not economic; for the idea of a purely
economic collapse makes no sense. 24

In other words victory comes not from the working of economic


laws, but from a social and political mobilization which, though
facilitated by objective conditions, has nothing automatic about
it and indeed requires organization and leadership.
Hilferding is sometimes criticized for basing too much of his
argument on the German case. 25 I have indicated that this is
precisely the strength of his book. He does not neglect the
internationalization of capital that occurs during the stage of
98 Political Economy

finance-capital, but he sees this internationalization accurately as


having a firm national base secured with protective tariffs.
According to Hilferding:

... international agreements represent a kind of truce rather


than an enduring community of interest, since every change in
the tariff defences, every variation in the market relations
between states, alters the basis of the agreement and makes
necessary the conclusion of new contracts. More solid structure
can only emerge when either free trade more or less eliminates
national barriers, or the basis of the cartel is not the protective
tariff but primarily a natural monopoly, as in the case of
petroleum. 26

Lenin

Though Hilferding's conceptualization of finance-capital lays the


basis for a stage theory of imperialism, Hilferding himself did not
develop the concept 'stage'. In Hilferding's thinking finance-
capital is simply an extension of Marx's Capital. 27 However, I
have argued that the concept 'stage' is all-important if we are to
escape the pitfalls of the logical-historical method. Lenin's
Imperialism is of theoretical importance primarily because the
concept 'stage' is for the first time brought to the fore. But
because Lenin was under the influence of the all-pervasive
logical-historical method, and because his intention was primari-
ly polemical and not theoretical, the full theoretical implications
of the concept were not developed by Lenin. In particular Lenin
did not see stage theory as a distinct level of analysis, and
therefore he did not clearly pose the problem of the relation
between the theory of capital in general and stage theory.
Lenin argues that at a certain stage of development, concentra-
tion leads to monopoly.28 This is clearly inadequate. First, he does
not clearly distinguish concentration and centralization of
capital. Concentration by itself (growth by reinvesting profits)
would not necessarily ever lead to monopoly because it leads to
larger but not necessarily fewer enterprises. The development of
finance-capital in the late nineteenth century was primarily the
result not of concentration but of centralization (merging existing
units of capital). Though pure theory can outline the general
Stage Theory 99

tendencies towards both concentration and centralization, the


more concrete analysis of stage theory is necessary to explain the
extremely rapid centralization of capital in the late nineteenth
century. The concept of finance-capital, the dominant form of
capital, is necessary to grasp this rapid centralization of capital. I
contend that neither concentration nor centralization at the level
of a purely capitalist society can possibly explain the rapid
centralization that occurred from 1890 to 1905. To understand
this, we must move to the more concrete level of stage theory
which brings in considerations of the type of use-value produc-
tion that required this rapid 'merger movement'. It is not enough
to know that capital has an abstract tendency to concentrate and
centralize in order to explain this sudden and radical centraliza-
tion that occurred at this particular time in history. For this we
need stage theory and its concept 'finance-capital'.
Lenin centres his theory of imperialism on the concept
'monopoly-capital' as opposed to 'finance-capital'. The concept
of 'monopoly-capital' is as applicable today as it was in 1900, but
a concept so lacking in historical specificity that it masks over the
extremely great differences between the pre-World War I and
post-World War II economic epochs is not very useful. 'Finance-
capital' as developed by Hilferding is a more concrete concept
than Lenin's 'monopoly-capital' because it shows how the basic
contradiction between value and use-value is concretized in a
particular organization of capital in a particular epoch. Hilferd-
ing's concept of 'finance-capital' develops the modus operandi of
the dominant form of capital and accompanying state policies;
whereas 'monopoly' simply refers to the situation of a few large
firms in each major industry.
At times Lenin slips into a empiricist rather than a dialectical
approach. His concept of 'imperialism' is arrived at in part by
abstracting from 'the four pillars': Germany, France, Britain and
the United States. 29 Using this approach, he arrives at too high a
level of abstraction, where the dominant form of capital and
accompanying state policies lose their historical specificity and
internal integrity. The result is looseness and abstractness. For
example, tariff policy is much less important in Britain than in
Germany, so when he abstracts from their differences to arrive at
what they have in common, tariff policy precipitates out and
becomes secondary. The dialectical method formulates stage
theory by looking for the concretization of the dialectic of capital
100 Political Economy

that is the purest or most representative type for the epoch. In this
way we can study a concrete and coherent paradigm as the
dominant type and be clear about how this type necessarily
operates, and we avoid the abstract impressionism of empirical
abstraction. Lenin's theory of imperialism is as good as it is
because Lenin had read Capital and therefore had a grasp of the
inner logic of capitalism, so that lurking behind what appears at
times to be a method of empirical abstraction is a good grasp of
the inner workings of capitalism. Also because of the influence of
Hilferding on Lenin, Germany tends to become the paradigm
case, though less explicitly so than with Hilferding, and occasion-
ally compromised by the empiricism of the 'four pillars'
approach.
The logical-historical method that permeated the work of all
the classics dealing with imperialism tends to lead to economism.
This is because the laws of motion of pure capitalism are purely
economic, and if we see imperialism as the natural outgrowth of
pure capitalism and see the analysis of imperialism as a simple
extension of Capital, then our analysis of imperialism is likely to
be formulated in purely economic terms. But at the level of stage
theory the state plays an important supporting role to the
dominant form of capital accumulation. In the case of finance-
capital, politics and economics are so integrated that finance-
capital is inconceivable without the collaboration of particular
state policies. The variation of state policies from country to
country is likely to be even greater than the variation of economic
forms, so that Lenin's method of empirical abstraction from the
'four pillars' will precipitate out most of the political, leading to
an analysis that is overly economic and overly abstract. Of all the
classical writers, Hilferding deals most with the political dimen-
sion, but even he does not clearly trace the necessary connections
between the dominant form of capital accumulation and state
policy. His focus on Germany as the classical case of finance-
capital enables him to get further than the other writers with this,
and though a clear theory of state policy is not worked out, the
raw material for such a theory is there.

Luxemburg

Both Rosa Luxemburg'S Accumulation of Capital (published in


1913) and her Anti-Critique (published in 1915) were influential
Stage Theory 101

and controversial from their first appearance in print. 30 In order


to understand her conception of imperialism, it is first necessary
to look at her general views on the accumulation of capital. This is
because for her imperialism is simply the accumulation of capital
in the phase before its final collapse. After a lengthy reconsidera-
tion of the reproduction schema at the end of volume II of Capital,
Luxemburg comes to the conclusion that:

Marx's diagram of enlarged reproduction cannot explain the


actual historical process of accumulation. . .. The diagram
sets out to describe the accumulative process on the assumption
that the capitalists and workers are the sole agents of capitalist
accumulationY

From the aspect both of realising the surplus value and of


procuring the material elements of constant capital, inter-
national trade is a prime necessity for the historical existence of
capitalism - and international trade which under actual
conditions is essentially an exchange between capitalistic and
non-capitalistic modes of production. 32

In Luxemburg's view the reproduction schema assumes a purely


capitalist society, but such a society is impossible because neither
capitalists nor workers can realize surplus value. A third party,
the outside market, upon which capitalism is always dependent
becomes necessary for accumulation. Since capitalism is not a
self-dependent totality, it cannot be theorized dialectically.
Instead, she argues, we must analyse the history of the exchange
between capitalism and its non-capitalist milieu. She claims that
there is a self-purifying tendency to capitalism since it does
gradually absorb its non-capitalist milieu. As the non-capitalist
milieu disappears, we approach pure capitalism, but since pure
capitalism cannot accumulate, collapse becomes inevitable. The
theory of a purely capitalist society, therefore, is not a theory of
capitalism's inner workings but is a theory of an impossible
utopia in the sense that capitalism as a mode of production must
destroy itself to the extent that it becomes purely capitalist.
Luxemburg believes that the alternative to her view is that pure
capitalism can create its own market, but the problem here is that
'capitalist accumulation becomes limitless once capitalist produc-
tion has built a sufficient market for itselr.33 and 'If we assume
... the economic infinity of capitalist accumulation, then the
102 Political Economy

vital foundation on which socialism rests will disappear.,34 In


other words, because it is impossible to generate a theory of crisis
and collapse from Marx's reproduction schema, they are in-
adequate as explanatory models of accumulation. Apparently the
idea of socialism is viable only if supported by a theory of
collapse.
Since the theory of capitalist accumulation must, according to
Luxemburg, focus on the exchange between capitalism and its
non-capitalist milieu, what does Luxemburg have to say about
this all-imporant exchange relation? Her answer is that the
method of violence prevails, so that this all-important relation is
not an economic exchange at all:

The method of violence; then, is the immediate consequence of


the clash between capitalism and the organizations of a natural
economy which would restrict accumulation. 35

Only the continuous and progressive disintegration of non-


capitalist organizations makes accumulation of capital possi-
ble. 36

The method of violence that prevails in primitive accumulation


continues unabated throughout the history of capital accumula-
tion since primitive accumulation itself continues unabated.
Capitalist accumulation is primarily and always primitive
accumulation. Imperialism, then, is the final intense competition
over the last remaining bits of non-capitalist milieu as capitalism
reaches a purity that will ensure its collapse.

Imperialism is the political expression of the accumulation of


capital in its competitive struggle for what remains still open of
the non-capitalist environment. ... Though imperialism is
the historical method for prolonging the career of capitalism, it
is also a sure means of bringing it to a swift conclusion. 37

Imperialism does not differ fundamentally from earlier


accumulation based on the method of violence, it is simply the
swan-song of capitalism as it reaches its historical zenith and
finally divides up the entire globe prior to World War I. Therefore
imperialism in the early twentieth century is the final expression
of primitive accumulation.
Stage Theory 103

Luxemburg is mistaken in her view that the disappearance of


the non-capitalist milieu is the same thing as capitalism becoming
more pure. Uno and Sekine demonstrate that during the declining
stage, the stage of imperialism, capitalism becomes less pure even
though it increases its hegemony over the world. This is because
the development of both monopolistic practices and aggressive
state interventionism are large steps away from pure capitalism.
Thus capitalism does not become more pure as it absorbs the last
of the non-capitalist milieu. If anything capitalism declines not
because it becomes pure, but because it fails to become pure. The
use-value obstacles of economic life are such that past a certain
point capital must seriously compromise itself in order to increase
its hegemony; hegemony increases, but the entire system becomes
less capitalist.
By overemphasizing primitive accumulation and the method of
violence, Luxemburg loses sight of the uniqueness of capitalism.
Capitalism is the first mode of production in history that can even
imagine 'laissez-faire'. A purely capitalist society represents an
economy that operates without the intervention of extra-econ-
omic force, and this is one of its most fundamental defining
characteristics that differentiates capitalism from all other modes
of production. No doubt at the level of history, capitalism
continually resorts to the method of violence, but we should not
allow this fact to blind us to the historical specificity of capitalism
and lead us to collapse capitalism into an undifferentiated history
of violence and struggle. For Luxemburg, not only is the
specificity of capitalism lost, but also the specificity of stages of
capitalist development. Imperialism is not so much a stage but
just the latest manifestation of the method of violence.
Far from 'properly understanding' Marx, Luxemburg under-
mines the objectivity and scientificity of Marxist theory. If
capitalism is basically parasitic, as Luxemburg claims, then it
cannot be rigorously theorized as a mode of production that has
internal integrity. The theory of a purely capitalist society and the
law of value are completely undermined. Theory and history are
collapsed together to the detriment of both: theory loses objec-
tively and rigour, and history loses its specificity. A number of
commentators claim that Luxemburg's greatest contribution is
her focus on the interface between capitalism and its non-
capitalist milieu, but to the extent that she abandons the law of
value, she has no objective referrent for arriving at criteria which
104 Political Economy

would clearly distinguish capitalism from its non-capitalist


milieu. 38 If we are not clear about what capitalism is, then neither
can we be clear about the non-capitalist milieu.
In his critique of Luxemburg, Bukharin recognizes some of her
errors when he writes:

One has to know that abstract theory is a key to the knowledge


of reality and one has to know how to handle it ... between
abstractions and their applications to empirical reality there
are a whole lot of logical steps, which under no circumstances
may be omitted. . .. Any analysis of the relation between the
capitalist world and the 'third persons' has to be more concrete
than theoretical constructions of Capital. 39

Bukharin recognizes that Capital theorizes pure capitalism which


must be mediated with the historical, but he himself is too caught
up in the logical-historical method ever fully to draw the
implications of this. Bukharin slides over the theoretical problem
of precisely specifying these relations by use of a rather poetic
metaphor. According to Bukharin, even in the stage of imperial-
ism, the overwhelming majority of the world's population remain
outside the capitalist mode of production; and yet capitalism 'is
the conductor in the concerto of economic forms,.40
Like Luxemburg, Bukharin adheres to a theory of collapse, but
for him the underlying contradiction is not the loss of a non-
capitalist milieu but the contradition between the internation-
alization of productive forces and the nationally limited methods
of appropriation. 41 Though his critique of Luxemburg is largely
correct, Bukharin also slides into a theory of collapse which is the
all-too-often economistic outcome of the logical-historical
method.

Conclusions
I must conclude by emphasizing that even the best of the classics,
Hilferding's Finance Capital, is far from being an adequate theory
of the stage of imperialism from 1870 to 1917. All of the attempts
to theorize this world-historic stage that I have considered are
inclined towards economism because they attempt to derive their
theory too directly from Capital. But stage theory must grasp the
integration of the dominant form of capital accumulation with
Stage Theory 105

the political and ideological, and it is only Hilferding who


proceeds any distance at all with this task. The levels of analysis
approach developed by Uno offers us a much sharper conception
of the inner essence of capitalism, and at the same time a method
of relating this understanding in a systmatic way to more concrete
organizational forms of capital. In this way we maintain the
rigour of the laws of motion of capitalism at one level of analysis,
and we can use this rigour to aid us in developing a more adequate
conceptialization of stages of capitalist development. This in tum
can serve to orient our study at a historical level where signposts
are needed to guide our paths of analysis through dense and
rapidly changing landscapes.

6 RECENT THEORIES OF IMPERIALISM AND


UNDERDEVELOPMENT

Because the theories of imperialism developed since World War II


are largely based upon the work of Lenin and Luxemburg, their
errors tend to be further compounded. Lack of clarity about the
relation between the theory of capital and capitalist history lead
to eclectic borrowings from Marx's Capital coupled with ideas of
monopoly capitalism which often produce a theoretical muddle.
There has been a mushrooming of Marxist literature on
imperialism and monopoly capitalism in recent years. Most of
this literatue has suffered from two major weaknesses: first, in
seeing the post-World War II period as a continuation of the
stage of imperialism or monopoly capitalism, it fails to under-
stand the specificity of this period; and second, in following the
logical-historical method, it tries to apply concepts of Marx's
Capital directly to the current conjuncture. Out of these basic
weaknesses flow numerous other shortcomings. For example, by
applying the law of value to the current conjuncture, it arrives at
economistic interpretations, which fail to emphasize the impor-
tance of the political and which see the law of value operating
where it cannot. In unconsciously sliding back and forth between
pure theory and the historical concrete, it tends to overgeneralize
and undermine the integrity of theory and distort our understan-
ding of history. As a result, it fails to grasp either the specificity of
distinct stages of capitalist development or the peculiar features
of the current conjuncture.
106 Political Economy

Most recent works on imperialism or monopoly capitalism are


theoretically weakened by the failure to see the necessity for three
distinct levels of theory. Capitalism has an inherent tendency to
expand; this much is established clearly at the most abstract level
of theory. The actual form that this expansion takes is delimited
at the level of stage theory by the predominant structure of capital
and accompanying state policies. Historically capital first takes
root in certain areas, and it develops very unevenly on a world
scale. At the level of stage theory, we can understand types and
tendencies of expansion during a particular stage. Thus mer-
chant-capital, small manufacturing capital and finance-capital
foster certain types of expansion and place structural limits on the
types of expansion that are possible. Actual forms of expansion
such as the relation between Britain and India between 1750 and
1900 must be theorized at a historical level.

Baran and Sweezy

Monopoly Capital by Baran and Sweezy is an important and


influential work.42 They place a strong emphasis on the break
between competitive and monopoly capitalism and argue for a
separate theory of the laws of motion of monopoly capitalism in
contrast to Marx's Capital which was based on competitive
capitalism. 43 Their book focuses on the problems of excess capital
in monopoly capitalism and is particularly strong in bringing out
the irrational and reactionary character of post-World War II
capitalism with its dependence on military spending. If the
strongest part of the book is its underscoring of important
features of post-World War II capitalism, its greatest weakness is
its theoretic infrastructure.
Baran and Sweezy assume the theory of monopoly-capital is at
the same level of analysis as the law of value, and this leads them
into a number of errors. For example, they see only one stage
from 1870 to the present. But the differences between the classical
stage of imperialism from 1870 to World War I and post-World
War II capitalism are very great. Although it is true that
monopoly-capital and excess exist in both periods, the modes of
operation of monopoly and the ways that problems of excess
capital are dealt with differ greatly. Thus their theory is too
abstract and too economistic to deal with the specific modes of
Stage Theory 107

accumulation and accompanying state policies that are dominant


in these two periods. Let me consider some of the differences for a
moment. In the classical period (1875-1917) the international
gold standard was operative, and now the international monetary
system is completely different. Then the internationalization of
production was minimal, today it is not. Then the state lacked the
capability to manage social demand, and now demand is
managed as a matter of course. Then indebtedness was sharply
constrained in comparison to the debt expansion now. Then the
economic weight of the state was small and the welfare state was
just beginning, and now the economic weight of the state is
immense. Then there was a small service sector, and now there is a
large one. Then no socialist movement had achieved power, and
now half the world favours some form of socialism. The abilities
of monopolies and of political forces to manipulate the economy
are much greater today than in the stage of imperialism when the
market was still basically sovereign. Baran and Sweezy's theory of
monopoly capitalism is too abstract and economistic adequately
to take account of these differences.
A levels of analysis approach and a recognition of the
specificity of the stage of imperialism would greatly strengthen
their book. The law of value is still operative in the stage of
imperialism though weakened and distorted, but the period from
1917 to the present should be theorized as a transitional phase.
Baran and Sweezy continually emphasize the dependency of
monopoly-capital on exogenous factors, but this is precisely the
situation in a phase of transition when the law of value has lost its
internal integrity and coherence. In a transitional phase, it is
correct to argue that the law of value does not apply, but then
there are no laws of motion with the same logical status as the law
of value. It is then possible to move away from an economistic
single-factor analysis that places too much weight on the problem
of surplus absorption to a recognition of the importance of
political factors in their own right. The present conjuncture could
then be understood as a movement away from the law of value in
a phase of transition with a serious underconsumption problem
as one factor in a complex which includes consideration of such
things as the internationalization of capital, forms of state
intervention, the international division of labour, international
finance and the monetary system, class struggle and the spread of
socialism, etc. As it stands their theory can be charged with being
108 Political Economy

too abstract and too simplistic, even though in a one-sided way,


like a Weberian ideal-type, they do bring out the underconsump-
tionist aspect of monopoly-capital.
It may be true that monopoly capitalism could not have
survived without wars and epoch-making innovations, but this is
not sufficient to understand the shifting contours of twentieth-
century capitalism as an unravelling of capitalism. 44 As more and
more of our economic life escapes market regulation and becomes
de-commodified, to that extent our economic life becomes
politicized and dominated by power-brokers. This unravelling is
best understood as a complex of structures and processes that are
both economic and political and that are moving ineluctably
away from the regulation of the law of value, rather than as a
simple counterposition of underconsumption with external
stimuli.

Emmanuel
Imperialism seen from the point of view of the Third World has
generated the theory of underdevelopment. The causes of under-
development that are most frequently mentioned are the draining
off of surplus, the unfavourable international division of labour
and unequal exchange. I do not want to enter into a full analysis
of this literature, but a brief discussion of Emmanuel's Unequal
Exchange will serve to develop some aspects of the approach to
underdevelopment that flows from the work of Uno and Sekine.
According to Emmanuel the root cause of underdevelopment is
the unequal exchange between the core and the periphery.
Because of the lack of mobility oflabour, the periphery develops
into a low-wage area. Resulting from this is an unequal exchange
in which more labour from the periphery is exchanged for less
labour form the centre. Wages are the independent variable
determining prices, so that commodities produced in the core
have a high price and those produced in the periphery have a low
price. Over time unequal exchange promotes the wealth of the
centre and the poverty of the periphery. Emmanuel attempts to
explain this unequal exchange in purely economic terms as an
'equalization of profits between regions where the rate of surplus
value is institutionally different' .45
In a purely capitalist society all exchange is equal exchange. To
the extent that a society is capitalist, systematic unequal exchange
Stage Theory 109

cannot take place. Unequal exchange can only take place to the
extent that we move away from capitalism towards monopoly,
political intervention, or lack of a unified market. We cannot
therefore use the law of value to explain unequal exchange, and
though we can introduce the concept of unequal exchange at the
level of stage theory, its full development can only take palce at
the level of historical analysis.
When we look at the history of the uneven development of
capitalism on a world scale, Emmanuel's 'unequal exchange'
appears to be an entirely inadequate explanation, especially when
we give it his economistic interpretation and treat it as the basic
cause of all underdevelopment. Of course, unequal exchange does
take place, but it takes many different forms and usually requires
the backing of extra-economic force. Unequal exchange con-
tributes more in some times and places and less in others to
underdevelopment, and in general is only one and not necessarily
the most significant factor explaining underdevelopment. The
reason for this is that Emmanuel's 'unequal exchange' focuses
entirely on purely economic external trade relations, but these
relations cannot be explained by the laws of motion of capital and
therefore always lead one to look for deeper more basic causes,
usually political, that make unequal exchange possible.
If we list some examples of unequal exchange, it will be
apparent that the political dimension is crucial and that different
types must be situated in different stages and phases of capitalist
development. Take as an example the traingular trade between
Britain, Africa and the Caribbean that developed during the stage
of mercantilism. Lack of a unified market, politics and monopoly
all play a role in institutionalizing this system of unequal
exchange. Or take Britain's trade of cotton textiles with India in
the first half of the nineteenth century. Here the interesting
phenomena is not unequal exchange, but the ruinous impact on
Indian craft production of cheaper British cotton textiles.
Consider the export of cotton from Uganda to Britain in the
1920s. Many small peasant producers of cotton face a monopolis-
tic buyer who forces low prices on the peasants. Here we have a
sort of unequal exchange, but not of Emmanuel's type. Finally if
we consider OPEC and the Seven Sisters, we see yet another type
of unequal exchange which must be explained at least partially in
political terms. None of these examples fit Emmanuel's concep-
tion of unequal exchange.
110 Political Economy

In order to understand underdevelopment in a particular


region of the world, we need to look both at the economic
structures and resources present in the region when it began to be
incorporated within the capitalist mode of production, and at
how the stage of capitalist development with its particular mode
of accumulation related to this new region. A purely economic or
a purely external approach which only looks at trade is in-
sufficient. If we consider examples like Japan, China, Uganda,
South Africa, Mexico and Honduras, the diverse paths of
development become obvious and the dangers of over-
generalizing from one or a few causes or of trying to rely on purely
economic explanations becomes readily apparent.

Palloix

In recent years the work of Christian Palloix has become


influential amongst Marxists concerned with the theory of
imperialism and the history of capitalist development. As much
as his work may have contributed to our empirical knowledge of
the current conjuncture, his overall theoretical framework has
serious shortcomings.
Let me begin by looking at some of Palloix's basic assumptions.
According to Palloix 'Gramsci demonstrated that Marxism
cannot be considered as a "science of the base", but must be a
complex articulation of theory and practice in the base-super-
structure relation. ,46 Palloix interprets this to mean that economic
categories are simply the reflection of class struggle. Thus 'it is
only the state of the class struggle at any given moment which
defines the tendency towards the equalization of the rates of
profit' .47 As a direct consequence of this approach Palloix
completely undermines Marx's effort to construct a science of the
laws of motion of capital, because if the law of value is from
moment to moment dependent completely on the state of class
struggle, then there can be no law of value. In this case all we can
do is empirically study the particular state of class struggle in each
country at each moment. Palloix fails adequately to grasp the
reification that differentiates capitalism so radically from other
modes of production, and instead focuses on class struggle which
is what capitalism has in common with other modes of produc-
tion.
Stage Theory 111

Palloix's failure to grasp the inner essence of capitalism is


demonstrated by his claim that it is only since World War II that
capitalism has become fully developed and that the law of value
has really come into full operation internationally. This is claimed
for a period that I would argue is transitional and is rapidly
moving away from capitalism and where the law of value appears
to be largely inapplicable. Of course, if capitalism is simply large-
scale production with wage-labour, then capitalism is more
dominant in the world than ever before. But what Palloix
completely overlooks in his one-sided conception of capitalism is
the extent to which capitalism and the law of value require a
competitive market and the commodification of economic life.
The law of value can only display its workings without distortion
in a purely capitalist society. Even at the level of stage theory the
law of value translates largely into structural relations which only
approximate the law of value. At the level of empirical history the
law of value loses all quantitative precision and must be
understood in terms of structural tendencies which may be
distorted and deflected by many local particulars and contingen-
cies. The law of value operated historically most fully in Britain
from 1830 to 1870, but even here large parts of the economy were
not fully capitalist and political policy interfered with the law of
value in a myriad of ways. While it is true that production has
become more international than ever before, it does not follow
that now for the first time the international law of value operates,
and this is because the international production that we have
today is not very capitalist.
Palloix's theoretical framework detracts from his interesting
and valid empirical investigations into changes in the inter-
national economic order. By directly politicizing economic
theory, Palloix ultimately forces us to abandon the theory of the
necessary inner connections of capital in favour of empirical
studies of class struggle. Empirical studies of class struggle are
important and the theory of a purely capitalist society can aid us
in carrying out such studies only if we appreciate the necessary
theoretical distance between levels of analysis. Even though the
law of value does not directly apply in the phase of transition, still
it serves as a reference-point for the historical movement away
from itself. Palloix both applies the law of value directly to the
current period and at the same time undermines its explanatory
power by making it a mere reflection of class struggle.
112 Political Economy

This brief survey of both classical and modem writings on


capitalism in the twentieth century is meant to indicate some of
the ways that the approach of Uno and Sekine can aid us in
improving our study of capitalist history. Marxists in the West
have never clearly grasped the dialectical character of the theory
of capital and have therefore run into great difficulties in trying to
relate the theory of capital to history. The central orthodoxy has
been the logical-historical method, which solves the problem of
relating theory to history by seeing it as a non-problem. A direct
consequene of the dominance of the logical-historical method
has been a pervasive one-sided economism, or as in the case of
Palloix and others a pervasive one-sided politicism.

7 'PERIODIZING' CAPITALISM

Instead of developing a stage theory as a distinct level of analysis


out of the objective dialectic of capital, many Western Marxists
simply 'periodize' capitalist history by demarcating stages of
development according to their own criteria. For this reason there
are as many periodizings of capitalism as there are theorists trying
to periodize. In this section I want to discuss two works where
some effort is made to treat periodization seriously. What is
needed is not the drawing of somewhat arbitrary lines dividing
different phases of capitalist history, but a distinct level of
analysis which externalizes the dialectic of capital.
In Class, Crisis, and the State, E. O. Wright goes further than
most Western Marxists in developing a theory of stages of
capitalist development. Wright's periodization is based on the
central constraints on accumulation and the structural solutions
to those constraints. Accordingly he develops six stages of
capitalist development which are as follows: 48

1. Early period of primitive accumulation: transition from


simple commodity production to expanded reproduction.
2. Transition from primitive accumulation to manufacture.
3. Transition from manufacture to machinefacture.
4. Rise and consolidation of monopoly-capital.
5. Advanced monopoly-capital.
6. State-directed monopoly capitalism.
Stage Theory 113

What is interesting here is not so much the periodization itself


since it appears to be somewhat impressionistic, but Wright's
argument that crises and forms of expansionism take different
forms in different stages, and therefore his implied emphasis on
the importance of some kind of stage theory. Thus although
Wright is not clear on how to go about systematically construct-
ing stage theory, his recognition that some kind of stage theory is
important is a forward step within the context of Western
Marxism.
Another serious effort at periodizing capitalism can be found in
Rereading Capital by Fine and Harris. 'The general method for
periodizing modes of production - according to their own
material development toward a new mode - is adopted.'49 For
capitalism the development is towards socialism. Thus their
criterion for periodization must be the progressive socialization
of the means of production under capitalism. 'Our basic principle
for periodizing the capitalistic mode of production brings about
distinct stages involving restructuring of the social relations of
reproduction.'50 Using this criterion, Fine and Harris arrive at
three stages: Laissez-faire capitalism, monopoly capitalism and
state-monopoly capitalism. Production becomes increasingly
socialized as we move from one stage to the next. The problem
with their criterion is that instead of being derived from the basic
value/use-value contradiction of the dialectic of capital, it is
derived externally to the dialectic of capital from a future mode of
production that capitalism is supposedly moving towards. As a
result their criterion lacks any objective grounding in the dialectic
of capital. The important contribution of their book is not the
particular periodization that they arrive at, but the extended
effort to construct a theory of stages at all- the recognition of the
importance of stage theory.
I would argue that the key to constructing stage theory is a clear
and precise understanding of the law of value, and this is what the
dialectic of capital provides. Without such a rigorous and
objective dialectic, the tendency is to treat Marx's Capital as a
'grab-bag' for extracting whatever criteria seem most appealing
to the particular theorist. Thus one theorist uses Marx's forms of
the circuit, another uses an impressionistic understanding of
accumulation and yet another uses socialization of production.
No doubt many other criteria could be extracted from Marx's
Capital or even more broadly from the corpus of Marx's writings
114 Political Economy

so that we could end up drawing many lines through history or


just one line, as in Baran and Sweezy's two-fold competitive
versus monopoly capitalism. But the project is not one of
extracting criteria for the purpose of drawing lines through
history, rather it involves a distinct level of theory which
accurately represents the types of accumulation that are domin-
ant as the dialectic of capital externalizes itself in history.

8 CONCLUSION

This approach to stage theory based on the work of Uno and


Sekine can help resolve or shed light on many debates and
confusions in the history of Western Marxism surrounding the
relation between the law of value and history. Stage theory can
help sort out issues concerning crisis theory, class and the state, to
mention a few issues that have recently received a lot of attention.
Also stage theory problematizes the relation between the law of
value and history in a way that forces us to think clearly and
precisely about this relationship.
My presentation here is only a beginning, and there is a great
deal to be worked out. Not only does stage theory itself need to be
developed so that it can better serve as a guide to more concrete
historical studies, but also and even more pressing we need to
develop the theory of the phase of transition in order to
understand more clearly the main dynamics of the current
conjuncture. This knowledge is essential in guiding the Left in
developing effective strategies of change.
5 The Historical Analysis
of Capitalism
Unfortunately there are no extended historical studies by the Uno
School available in English.) I shall not try to fill this void by
carrying out such a study in this chapter. Instead my focus will be
on indicating some of the ways pure theory and stage theory can
guide historical analysis, on the character of historical analysis as
a distinct level of theory and on a number of recent debates that
have a bearing on historiography. In particular I shall look at a
number of reactions against economism and shall argue that in
reacting against economism many thinkerS~ have fallen into
politicism. I shall argue that we can avoid both economism and
politicism by rejecting the logical-historical method which gives
rise to them. Another debate that will be briefly examined is the
one that centres on structure versus agency that has so engaged
English Marxism in recent years. Finally I shall look at some of
the controversies that surround the use of the concepts 'class' and
'class struggle' in the historical analysis of capitalism.
This part of the book is entitled 'Political Economy', and I have
made it clear that I am interpreting this term in the narrow sense
to refer to the scientific study of capitalism as opposed to some
broader meaning that might refer to Marxian social science as a
whole. This chapter, then, is not on the Marxian approach to the
study of history as a whole, but instead focuses more narrowly on
the Marxian approach to capitalist history. The importance of
this delimitation of our subject-matter will become clear later in
the book when I discuss historical materialism. Suffice it to say at
this point that only with capitalism is it possible to have a
dialectical theory with three levels of analysis.

1 LEVELS OF ANALYSIS
I return once more to the topic of levels of analysis in order to
explore the sense in which each level is distinct, to show how pure
115
116 Political Economy

theory and stage theory can guide our historical/empirical studies


and to indicate some of the dimensions of historical analysis.
The theory of a purely capitalist society is distinct in the sense
that it achieves closure by allowing the motion of value complete-
ly to encompass the production of use-value. A purely capitalist
society is self-contained because it is completely regulated by the
self-expansion of value. The self-containedness of the law of value
at the level of pure theory sharply distinguishes the law of value at
this level from the level of stage theory where it is externalized in a
concrete stage of capitalist development.
Stage theory represents a controlled reactivation of use-values
in arriving at historically dominant types of capital accumulation.
The law of value at the level of stage theory translates largely into
structural relations in which the law of value may only be
manifested in certain minimal or systematically distorted ways.
Yet when we look at the stages of mercantilism, liberalism and
imperialism, we find in each case a dominant way in which the
motion of value subsumes the labour and production process in
order to accumulate and expand. So stage theory does not
represent so much the law of value as a whole, but an abstract-
type that represents the purchase that the law of value has on
history at different stages of capitalist development.
The distinction between stage theory and historical analysis is
not so sharp as the one between pure theory and stage theory. To
a certain extent stage theory and historical analysis interpen-
etrate. Historical analysis is needed in combination with pure
theory to contruct the material-type of stage theory, and stage
theory is needed to orient and guide historical analysis. The
difference is one of focus. Stage theory does not focus on actual
historical change but rather on constructing a dominant material-
type that presides over historical change in a particular stage of
capitalist development. Stage theory is basically static and
structural whereas historical analysis can fully study the
specificities and particulars of historical change, contingency and
agency. But if historical analysis also makes abstractions, how do
we differentiate historical abstractions from the abstractions of
stage theory? Abstractions from history are constructed with the
guidance of pure theory and stage theory, in contrast to the
abstractions of stage theory which are concretizations of the law
of value expressed in material-types. The distinction between
stage theory and historical analysis is not a sharp one, but I hope
Historical Analysis of Capitalism 117

that it will become clearer as the chapter progresses. Next let me


tum to historical analysis. First, I want to discuss the contribu-
tions of pure theory and stage theory, and then I want to consider
some of the principal aspects of historical analysis.
The primary controversy in the writing of capitalist history
arises from lack of agreement over the meaning of 'capitalist'. Is
capitalism primarily generalized commodity exchange, private
control over the means of production, the exploitation of wage-
labour, a market-governed society, a society dominated by
industrial-capital or the predominance of relative surplus value
extraction? Sometimes it seems as though there are as many
meanings to 'capitalism' as there are theorists. Each theorist
seems to make an aspect of capitalism primary, but this can
produce a one-sided emphasis on the realm of circulation in
defining capitalism (e.g. Wallerstein) or the realm of production
(e.g. Brenner).2 What is needed is a rigorous conception of
capitalism in its totality and in its inner essence, and that is
precisely what the theory of a purely capitalist society provides.
As we shall see later, having a clear and precise concept of
capitalism is especially important for theorizing the transitions to
and away from capitalism.
The theory of a purely capitalist society not only provides an
adequate synthetic definition of 'capitalism', but also it exposes
the laws of motion of capitalism or its necessary inner dynamics.
It shows how the 'fictitious commodities' (i.e. not capitalistically
produced), labour-power, land and money, are subsumed to the
commodity-form. 3 It brings out the fundamental importance of
the commodification of labour-power to captialism and
articulates the objective and necessary connections between
capital and labour. It demonstrates the necessity for expansion,
for periodic crisis and for an industrial reserve army. This can
serve to guide our study of both structure and struggle at a
historical level.
Stage theory not only aids historical analysis within each stage
of capitalist development, but also the theory of the mercantilist
stage contributes to the analysis of the transition from feudalism
towards capitalism, and the theory of the imperialist stage helps
the understanding of the phase of transition away from capital-
ism (and it is hoped towards socialism). It is obvious that the
theory of imperialism will aid the study of British economic
history from 1875 to 1914, but perhaps it is not so apparent how
118 Political Economy

the theory of imperialism contributes to understanding the post-


1917 phase of transition. The period between the wars was
marked by the effort to reinstate the pre-World War I mode of
accumulation. In order to understand the general failure of these
efforts we need to grasp both the mode of accumulation of
finance-capital and why because of changed historical circum-
stances it could not be successfully reinstituted between the world
wars.
If stage theory is based on a dominant material-type, that type
must always be located in a particular nation-state even if capital
accumulation always has an international dimension. At the level
ofhistorical analysis, we look at how the dominant material-type
actually operates in the core nation and on a global scale. This
analysis must be both economic and political and should explore
the intersection between capital accumulation and class struggle.
The history of global capitalism from 1875 to 1917 is not the same
thing as the stage theory of imperialism. Finance-capital operates
somewhat differently in Germany, the United States, France and
Britain and this must be studied at the level of historical analysis.
In order to understand the development of finance-capital in
France, it is necessary to study both the internal dynamics of the
French economy and how it is situated in the global economy. I
do not assume as Wallerstein does that the primary unit of
analysis of capitalist history is the world system and that the
secondary units are sub-systems. The extent to which capital
develops within a national economy as opposed to between
national economies is an open question, though in general I
would contend that determinant modes of accumulation develop
primarily within specific nation-states even though they may have
an important international dimension. In so far as parts of the
globe are pre-capitalist or post-capitalist they need to be studied
in their autonomy from capitalist history as well as in their
connectedness.
In so far as the history that we are concerned with is capitalist
history, we would expect economic structures and processes to be
predominant, but at the level of historical analysis where
capitalism has a partial hold, it is often not so easy to separate the
economic from the political and ideological. Very often the
political and ideological, including class struggle, become impor-
tant determinants of historical change especially as they intersect
with the economic. At the level of historical analysis the political
Historical Analysis of Capitalism 119

and ideological cannot be considered as passive epiphenomena of


the economic base. On the contrary, they play decisive roles in
certain kinds of historical change, and in the phase of transition,
when the inner logic of the economic is severely weakened, the
economic, political and ideological may be co-determinant.
Because stage theory is fundamentally structural, agency can
only be fully studied at the level of historical analysis. Even
though the Uno/Sekine approach analyses the economic policies
at the level of stage theory, these policies are analysed as those
required by the dominant type of capital accumulation - that is, in
structural terms. At the level of historical analysis we are still
interested in structural imperatives and structural constraints,
but we are also interested in agency and the degree to which
agency can change structures as opposed by being constrained by
them. This means that we can deal with class struggle in all its
complexity. Class struggle may play an important role in
explaining some historical changes. Later in the chapter I shall
argue for the importance of objectively grounding our concept of
'class' in the law of value in opposition to those who adopt a
subjectivist approach that proclaims the primacy of class struggle
in the determination of class.

2 LEVELS OF NECESSITY

In the previous chapter I gave some examples to illustrate the


stronger necessity that exists at the level of pure theory and the
weaker necessity at the level of stage theory. I wish to return to
this topic here in order to complete the discussion of necessity in
relation to the three levels of analysis. This is important because
part of the reason for the distinctiveness of each level is that there
is a different degree or kind of necessity asociated with each level.
If we mix the levels of analysis we are likely to see a stronger
necessity where a weaker necessity is appropriate or vice versa.
The scientificity of our approach depends in part on grasping the
degree of necessity that is possible at each level so that we achieve
that level of necessity not less because this would produce a
weaker theory and not more because this would produce
dogmatism.
Marx sometimes refers to the law of value as 'the necessary
inner connections of capital'. I have interpreted this to mean a
120 Political Economy

theory of a purely capitalist society where total reification


removes contingencies which would interfere with the strict
necessity of the law of value. Since the totality of economic life is
managed by the commodity-economic principle, we do not need
to consider particular political laws such as tariffs or labour
legislation that might interfere with the operation of necessity.
The law of value in the context of the dialectic of pure capitalism
is what we mean by 'necessity'. The dialectic of capital, for
example, shows that the commodity-form necessarily generates
the money-form which necessarily generates the capital-form,
and though this cannot be demonstrated in detail here, the logic is
ofthe sort: the commodity-form cannot fully be what it is without
the money-form and the money-form cannot be fully what it is
without the capital-form. Here the necessity involved is an inner
logic which is inner precisely because capital is self-determining as
opposed to other-determined. But as the law of value externalizes
itself in the abstract-types of stage theory, the structural neces-
sities at this level of analysis presuppose certain conditions which
are in part contingent.
At the level of stage theory, we make statements like 'the
capitalistic management of the sort of large and long-term fixed
capital investment required by heavy industry requires finance-
capital'. I cannot show according to the law of value that finance-
capital would necessarily emerge in the core states in the late
nineteenth century. But I can show that given heavy industry and
perhaps certain other structural features of capitalism (these are
contingent givens because they cannot be derived from the law of
value), finance-capital must develop, though again not necessari-
ly with the German steel industry representing its purest type.
Thus at the level of stage theory, we are looking at structural
necessities or in some cases tendencies which cannot be deduced
from the law of value by itself but represent a reconsideration of
the law of value in a concrete context which is in part a contingent
given. To say that the context is a contingent given does not mean
that there is no explanation for it, only that it is contingent
relative to the law of value.
With stage theory contingency is reintroduced in a controlled
and limited way in the material-type of a dominant form of use-
value production which requires a corresponding concrete organ-
ization of value formation and augmentation. Necessity is
modified by contingency in the form of historically specific
concrete circumstances. In contrast, I would argue that with
Historical Analysis of Capitalism 121

historical analysis contingency is modified by necessity. At the


level of history, we are agents confronted by structural con-
straints. In so far as we are speaking of capitalist history, those
structural constraints are predominantly economic, and for
theorizing these, stage theory and pure theory are a direct aid.
These constraints have to do with a further concretization and
particularization of the law of value and of the necessities
associated with it. But at the historical level there may also be
economic or even political and ideological structural constraints
that arise quite independently from the law of value. We can
speak of the necessities arising from such structural constraints
(those independent from the law of value) as contingent neces-
sities since the structures are contingent, but because they have a
power to persist, they give rise to certain necessities in relation to
their persistence.
Because of their importance, let me summarize the points being
made here. The levels of analysis of the Uno /Sekine approach are
distinct in part because they reflect different degrees of necessity.
Pure theory represents dialectical necessity unmodified by contin-
gency. Stage theory represents necessity modified by historically
specific types of contingency. Historical analysis represents
agency modified by both necessity (concretization of the law of
value) and by contingent necessity (persistent structures arising
independently of the law of value though possibly influenced by
the law of value). An example will help illustrate this. Let us say
we want to understand a particular capitalist crisis in Britain in
the 1880s. At the level of pure theory we can grasp the necessity
and character of periodic capitalist crisis. Stage theory elucidates
the type of crisis characteristic of a certain stage where necessity is
modified by contingent historical circumstances. Historical
analysis could look at the crisis from the perspective of agency
operating within constraints resulting from political, ideological
or economic structures which are more or less persistent. Thus the
crisis may have been more or less inevitable given a speculation
bubble which was bound to burst, and the speculation bubble
may have been more or less inevitable given the configuration of
constraints on capital investment. In theorizing these constraints,
we would be guided by stage theory and pure theory. At the level
of pure theory and stage theory, we analyse necessity by using the
pair 'necessary/contingent', but with agency at the level of
historical analysis the pair 'necessary/possible' must also be
considered.
122 Political Economy

3 ILLUSTRATIONS OF HISTORICAL ANALYSIS

As an example, let us say that we want to know why the petty


commodity production of cotton came to prevail in Uganda in
the first quarter of the twentieth century. This example will be
useful because since stage theory theorizes the dominant type of
capital accumulation, it pertains in the first instance to the 'core'
or the 'centre' of global capitalism as opposed to the 'periphery'.
This example will show how stage theory can guide our study of
the history of the periphery.
Stage theory can help us to understand why the partition of
Africa took place when it did, and it can help us understand the
types of relations that existed between the centre and the
periphery, i.e. why finance-capital was expansive and the types of
expansiveness possible given the capabilities of finance-capital.
Stage theory, however, is too abstract to include why a territory
with particular boundaries came to be the British colony of
Uganda. Also stage theory is too abstract to answer the
questions, why cotton and why petty commodity production?
The answer to these questions requires knowledge of the his-
torically specific use-value needs of Britain and the capabilities of
Uganda, in other words the realistic material possibilities that
existed for Britain to make a profit out of Uganda. What stage
theory tells us is that the 'centre' was increasingly protectionist
and nationalist, that the centre was interested in raw material
extraction from colonies at least cost, that the centre was opposed
to developing manufacturing in its colonies, that methods had to
be devised to control politically new, non-settler colonies with
minimum expenditure of manpower and minimum adminis-
trative costs, and that the existing mode of production in the
colony which generally lacked a labour-market posed serious
obstacles to any but 'primitive accumulation'. These structural
tendencies of the imperialist stage can help us to establish what
happened in Uganda and in other colonies, but the specifics of
why it was cotton and why petty commodity production require
investigations at the level of historical analysis and not stage
theory.4 In this case stage theory provides guidelines and
structural constraints for the historical analysis that is necessary
to answer the question.
As a second example, let me briefly consider the much-disputed
issue of the transition from feudalism to capitalism. Here the
Historical Analysis of Capitalism 123

theory of pure capitalism is helpful in distinguishing the capitalist


from the non-capitalist, and the stage theory of mercantilism is
useful as the theory of the first stage of capitalist development to
emerge out of the phase of transition.
The theory of a purely capitalist society makes it clear that the
commodifiction of labour-power is central to the transition from
feudalism to capitalism. At the same time it makes it clear that the
realm of production and class struggle should not receive one-
sided emphasis at the expense of the realm of circulation. These
guidelines clearly indicate the superiority of Brenner's approach
in the debate with Wallerstein since Wallerstein's position is
based on a one-sided emphasis on circulation and trade almost to
the exclusion of production and class struggle. 5 In reacting
against Wallerstein, Brenner may go too far in a productivist
direction in his strong emphasis on class struggle though he does
accord some importance to the development ofa world market. 6
Also Brenner has done important work on changes in the
agrarian sector that fostered the development of capitalism in
Britain. However, he mistakenly refers to these changes as
'agrarian capitalism'.7 Here clarity about the precise meaning of
'capitalism' becomes important. In the previous chapter, I argued
that because of its use-value character, agriculture is resistant to
the law of value. It is one of the last spheres of production to be
penetrated even partially by the law of value, and throughout the
entire history of capitalism has been penetrated only to a small
extent. Agrarian capitalism requires the full establishment of
industrial capitalism as a prerequisite since even rent can only
become a capitalist category to the extent that industrial-capital is
fully established. Rent can then be conceived as a subdivision of
the total surplus value which goes to landowners because of their
ownership of limited and monopolizable natural resources.
The stage theory of mercantilism makes it clear that the central
focus in the theory of transition should be on how it is that
merchant capital comes increasingly to subsume production
through the putting-out system. The rural domestic industry of
the putting-out system was made possible by the separation of the
direct producer from the land, and it also further facilitated this
process. The putting-out system promoted both the com-
modification of labour-power and the separation of manufacture
from agriculture. While the putting-out system represented a first
step in the subsumption of production to the motion of value,
124 Political Economy

there were severe limitations placed on productivity by such a


system. Growing international competitiveness and merchant-
capital's hunger for increased profits eventually drove the system
beyond its narrow productive base towards factory production.
Brenner's discussion of the agrarian sector helps explain why the
industrial revolution first occured in Britain. But he tends to place
too much emphasis on 'agrarian capitalism' and class struggle
and not enough on mercantilism as it intersects with the putting-
out system in his explanation of the transition.

4 REACTIONS AGAINST ECONOMISM

I now want to tum to some recent debates in Marxian social


science that profoundly effect the writing of capialist history. In
recent years one of the strongest trends in Marxist theory has
been a reaction againt economism. Economism has been blamed
for nearly all the failures of Marxist theory and practice, and has
been thoroughly rejected from ever more radically anti-econ-
omist perspectives. In some cases thinkers go so far in purging
economism from their thought that they also purge most of what
has been traditionally considered the core of Marxism. Econ-
omism has been a predominant trend in the history of Marxism,
and it appears in nearly all approaches that emphasize the
scientificity of Marxism. The different forms of scientific social-
ism as developed by both the Second and Third Internationals
had a strong economistic bent. Marx's Capital was identified by
Marx himself as well as by his followers as the basis for Marxist
theory as science. But the effort to apply the laws of motion of
capital or the law of value to the complex world of capitalist
history and capitalist social life often resulted in a Marxian social
science and a Marxian strategic thinking that were reductionist
and dogmatic. These tendencies became most exaggerated with
Stalinism, but even in its milder forms, economism is judged to
have lead to very serious strategic errors in the history of Marxist
practice.
In my view the source of error was not economism per se but
the logical-historical method. Most of those who have reacted
against economism remain within some form of the problematic
of the logical-historical method. Instead of overcoming econ-
omism in a positive dialectical way that preserves its contribu-
Historical Analysis of Capitalism 125

tions while shedding its errors, we get reactions that tend towards
equally one-sided and error-prone forms of politicism and
culturalism. The result is that we get rid of all the bad aspects of
economic determinism, but we also get rid of the law of value or
we undermine it to the point where its explanatory power is
severely weakened, and this, of course, weakens the objective
basis of Marxian social science.

Althusserian Structuralism

Althusser's conceptualization of the capitalist mode of produc-


tion as being an articulation of the relative autonomous practices
of economics, politics and ideology struck an important blow
against economism. 8 He argued that the political and ideological
are not simply the superstructure, but are independent practices
in their own right with their own causal efficacy. The problem
with this approach was that the relationship between the logical
and the historical or between the 'mode of production' and 'social
formation' was never clearly specified. Nor were the relationships
between the economic, the political and the ideological specified
in a determinant fashion for the capitalist mode of production
much less any other mode of production. As a result Poulantzas
(one of Althusser's students) developed a tendency to study the
political independently from the economic and ideological. In his
later works, responding to critics who pointed this out to him, he
moved from emphasizing the autonomy of the political to
emphasizing its interdependence. Thus the economic, the political
and the ideological all come to be inscribed within each other so
that he turns full circle back to the kind of 'expressive
problematic' that Althusser was origianlly attacking. In an
expressive problematic everything is internal to everything else;
there is no real externality and no substantial differentiation, with
the result that all separateness is always on the verge of collapsing
together into a simple unity. Especially in his last work, State,
Power and Socialism, Poultanzas moves back towards the
expressive type of problematic that Althusser tried so hard to
break with. The structuralists never rigorously theorized the
economic, much less the determinant relations between the
economic, the political and the ideological. Althusser put forward
the vague claim that the economic is determinant in the last
126 Political Economy

instance. But the theory of a purely capitalist society demon-


strates that the economic is the base.
The lack of theoretical determinateness within the Althusserian
problematic has led to its disintegration. Lack of theoretical
clarity on the relation between the logical and historical left the
Althusserians open to attack from the British Historical Schoo1. 9
A corollate to this was lack of clarity on the relation between
'mode of production' and 'social formation'. Confusion on this
issue generated a 'modes of production debate' which culminated
in largely rejecting 'mode of production' and returning to more
historical and concrete investigations at the level of social
formations. 10 Althusserians also failed to specify with any
theoretical rigour the relations between the economic, political
and ideological as is evidenced by their frequent use of the vague
term 'articulation' to specify these interrelations. A number of
problems flow from this lack of theoretical determinateness.
First, the relative autonomous practices are at times treated too
separately." Second, at other times the practices are made so
interpenetrating that they tend to collapse into an undifferen-
tiated cultural whole. 12 Third, political or ideological practice are
singled out and made predominant so that Marxism is converted
into idealism. 13 In some cases we see once-committed Althus-
serians, disappointed by the failure of 'high theory', turn on all
theory except for a skepticist minimum that limits social science
to the study of the interarticulation of discourses embedded in the
logic of particular concrete situations. 14

Laclau and Mouffe

Recent work by Laclau and Mouffe represents a marriage of the


sort of discourse analysis that emerged from the deterioration of
the Althusserian paradigm and Neo-Gramscian politicism and
culturalism. They have made important contributions to the
analysis of ideology and to the critique of economism but their
overall approach to Marxist theory is inadequate. They argue
that there are two forms of economism, epiphenomenalism and
class reductionism, and that economism is the single most
important source of both theoretical and strategic errors in the
history of Marxist theory and practice. 'Epiphenomenalism' that
takes the base/superstructure metaphor seriously and therefore
Historical Analysis of Capitalism 127

sees the superstructure as a passive reflection of the base has,


according to Laclau and Mouffe, largely been discredited and
rejected. But 'class reductionism' still remains as the manifesta-
tion of economism that most bedevils Marxism and the Left
generally:
The prevailing conception - which manifests the general
problematic of class reductionism - has been that all subjects
are class subjects; that each class has a paradigmatic class
ideology; and that each ideological element has a necessary
class belonging. This conception necessarily leads to seeing
ideological struggle as a confrontation between two closed
ideological systems completely opposed one to the other, in
which victory consists in the total destruction of bourgeois
ideology. There is no space here for a process oftransformation
of ideological elements, of differential articulation through
which new political subjects are created. Nor is there any space
to understand the importance of determinants of consciousness
which are not reducible to class position. 15
I entirely agree with this quotation which summarizes what in my
view is the most important contribution of Laclau and Mouffe.
Where I disagree is with their analysis of the source of the
problem of class reductionism and its solution. The problem is
not caused by economism so much as by the logical-historical
method that gives rise to economism by applying the law of value
with its two-class dynamic directly to history.
In reacting strongly against economism, Laclau and Mouffe
reject altogether the objective ground that Marx was trying to lay
for social science with his Capital, and as a result fall back into the
subjective idealism of discourse analysis. Their attack on econ-
omism leads them to the extreme position of not only attacking
the primacy of the economic, but of undermining the notion of
the economic as a relatively autonomous realm even in theory and
finally asserting the primacy of the political defined by the vague
and ubiquitous 'power'. In the process 'class' not only loses all
privileged status in their explanatory framework by being
reduced to simply one interest-group amongst others, but also
'hegemony' as the political/ideological articulation of subjects
becomes the key concept of their entire explanatory framework.
The result is a modem version ofWeberian interpretive sociology
complete with its 'internal point of view', 'meaningful action', its
128 Political Economy

politicism and idealism, only now posed in the latest language of


discourse analysis.
While I reject the epistemology of this position, I agree that
class reductionism has been and still is a problem within
Marxism. In the next chapter I shall argue that the 'legal subject'
is the basic superstructural form of capitalism from which I derive
the basic ideological and political forms. Also I shall argue for the
importance of the ideological and for the importance of develop-
ing clear and determinate theoretical conceptions of the relations
between the ideological, political and economic. Finally I agree
with Laclau and Mouffe in their emphasis on the need for a 'war
of position' in articulating ideological forms that will aid in the
transformation of subjectivities. But I take the strongest excep-
tion to their general epistemology, and we disagree in my view
because although we see some of the same symptoms, our
diagnosis of the underlying disease and our prescriptions for cure
are completely different.

Class Struggle Politicism


There are numerous thinkers who believe that the law of value is
either a reflection of class struggle or is so altered by class struggle
that it is no longer a law. In the previous chapter I discussed
Palloix who claims that 'economic categories simply reflect class
struggle' 16 and that 'The law of value depends upon a determinant
force, which is class struggle.'17 But if the law of value simply
reflects class struggle, then it must continually change with the
ever-shifting changes in the balance of force between classes. The
law of value is therefore no longer a law, and cannot really add
anything to the concrete class struggle. Palloix does not draw out
these implications of his politicism, for if he did, he would drop
value categories from his analysis and see that they add nothing to
his explanation except a wrapping of Marxist orthodoxy.
E. P. Thompson takes this next logical step in The Poverty of
Theory where he not only rejects the law of value, but actually
claims that it represents a penetration of bourgeois ideology into
Marxism. ls In a New Left Review article on 'The Theory of the
Falling Rate of Profit', Hodgson argues that the law of value is
wrong and produces mechanical (economistic?) Marxism. 19
According to him, what matters is class struggle and the
overthrow of capitalism - the law of value is a deterministic and
Historical Analysis of Capitalism 129

mechanistic diversion from the task at hand. Even though it


contravenes his structuralism, Poulantzas increasingly declares
the primacy of class struggle in his later works. Writers from
otherwise diverse perspectives agree in rejecting the primacy of
the law of value in Marxian social science and substitute the
primacy of class struggle.
In some cases the focus on class struggle has led to the view that
the basic problematic of historical explanation is one of oppres-
sion and resistance, or of power and domination and the
resistance to power and domination. It is no doubt true that
power relations permeate all of capitalist society as they do of
every other society; and it is important to study power relations
and especially to demystify or to 'deconstruct' them when they are
oppressive. But placing 'power' at the centre of social science
and equating it with politics creates an expressive problematic
which sees politics everywhere but which cannot make the clear
distinctions necessary to understand the historical specificity of
capitalism. Within a power problematic we can discuss the
politics of the family, the politics of production, the politics of art
and so on indefinitely; and though all these studies may be of
interest they must be partial studies without objective grounding
unless they are developed in a determinate relation to the dialectic
of capital. By equating politics with power or coercion, we can
indeed create an expressive problematic that places politics at the
centre and finds that politics is ubiquitous in all forms of social
life and in all societies, but this will not help us to understand the
precise character of the economic and the political under
capitalism and how they relate to each other. In the next chapter I
shall argue that in order to understand politics in the capitalist
mode of production we must first and foremost focus on the
historically specific and capitalist character of the capitalist state
and ideology. By focusing on the state, we can grasp capitalist
politics as determinant structures and determinant policies
flowing from those structures. Once we are clear about the
dominant forms, functions and policies of the capitalist state, we
can then develop determinant concepts to understand power
relations which become especially important in historical analysis
with the concern about agency. If we start by equating politics
with power, then it is difficult to get beyond a vague and diffuse
understanding of the political to any sort of understanding of the
historical specificity of capitalist politics.
We have seen that many schools of Marxism - diverse in other
130 Political Economy

respects - converge in their politicist abandoning of the law of


value and in their insistance on the primacy of class struggle. This
convergence makes the politicist perspective extremely strong in
the current intellectual conjecture - so strong in fact that we can
say it is the current orthodoxy. And yet, I want to argue, that in its
own way it is just as wrong as the economism that it has reacted
against. Politicism may seem to break with dogmatism and
reductionism, it may seem more revolutionary and more activist,
and it may even seem more creative as it breathes the heady 'let-a-
hundred-flowers-blossom' air; nevertheless we must at this point
emphasize the close relation between politicism and subjectivism
and insist that Marxism has always been more than subjectivism
and empiricism in theory and spontaneism in practice. And it is
not just a question of re-emphasizing the objectivist side of the
dualism - we must break from the logical-historical method
altogether.

5 STRUCTURE AND AGENCY

Althusser's famous claim that 'history is a process without a


subject' has given rise to vigorous counter-attacks from E. P.
Thompson and his followers, who claim that Althusser's struc-
turalism is a new formalism that denies the role of agency in
history. In this section I shall briefly consider the issue of
structure and agency by examining the debate between Althusser
and Thompson.
Althusser takes Marx's Capital as the basis for a universal
structuralist epistemology which achieves objectivity by suppres-
sing the subject. But according to Marx subjects are converted
into bearers of economic structures only by the reifying force of
capitalism, where 'production relations are converted into entities
and rendered independent in relation to the agents of produc-
tion' .20 Even with capitalism, I have argued that this reification is
only total at the level of pure theory, so that as we move to more
concrete levels, agency re-emerges. But with the structuralist
approach of Althusser, the subject is epistemologically suppres-
sed so that there is no way for it to re-emerge, and what is really
only appropriate for the theory of a purely capitalist society is
converted into a universal suppression of subjectivity for the sake
of objectivity. Such objectivity is bought at too high a cost since it
Historical Analysis of Capitalism 131

rests upon an artificial suppression of subjectivity and creates an


unbridgeable gap between theoretical structures and agency at
the level of the historical concrete. Contrary to this, the dialectical
approach of Uno and Sekine does not assume away the subject,
rather it lets the reifying force of the motion of value deactivate
the subject. Objectivity then is attained not by a theoretical
suppression of the subject but by allowing the objectification of
social relations that develops with the commodification of
economic life to complete itself.
Thompson's critique of Althusser in The Poverty of Theory is
quite extensive and at times stoops to venomous polemics. The
critique does not stop with Althusser's interpretation of Marx,
but extends to Marx himself. According to Thompson, Marx's
Capital represents the penetration of the formalism of bourgeois
political economy into Marxian social science. 21 It is:

a mountainous inconsistency - its laws cannot be verified, and


its predictions were wrong. As 'history' or as 'sociology' it is
abstracted to a 'model' which has heuristic value, but which
follows too obsequiously ahistorical economic laws. 22

It is not surprising that Marx's Capital as the founding work of a


new science should contain many imperfections and inconsisten-
cies, but what is surprising is that so many 'Marxist' theorists
should so easily abandon a work of monumental brillance instead
of making extended efforts to enlarge and refine it.
Thompson fails to grasp Marx's distinction between the mode
of inquiry and the mode of presentation. I have argued that the
mode of presentation of the theory of capital is a dialectic that
moves from the abstract to the concrete and therefore appears to
be an a priori construction, or as Thompson puts it, capital
appears 'as the unfolding of its own idea', 23 it 'has become an idea
which unfolds itself in history'. 24 The mode of inquiry carefully
sifts through classical political economy and the history of
capitalism in order to arrive at a clear comprehension of the
necessary inner connections of this mode of production. The self-
purifying and reifying tendencies of capitalism enable thought to
be guided by these tendencies in the construction of the theory of
a purely capitalist society. It is not a question of the idea and
thought being self-generating, but of grasping how material
reality itself becomes self-generating and can therefore guide
132 Political Economy

thought. In other words, it is capitalism itself which is the


'idealist' and not Marx the writer of Capital because it is quite true
that under the total reification of pure capitalism men and women
are mere bearers of economic relations, or personifications of
economic categories. The problem is not idealism; the danger is in
confusing pure theory where reification is total with actual
history where it is ever only partial. Since Thompson sees no way
of reconciling economic determinism at the level of pure theory
with agency at the level of history, he rejects the law of value
altogether. From the point of view of agency and class struggle,
the law of value appears to be formalist, idealist, economist and
determinist; so that it must be rejected except for a certain
minimal heuristic value.
For Thompson there seems to be an irreconcilable contradic-
tion between agency and the law of value. Thompson poses this
contradiction most sharply when he points out that according to
Marx the law of value consists of 'tendencies working with iron
necessity towards inevitable results' .25 But in opposition to this:

no worker known to historians ever had surplus value taken


out of his hide without finding some way of fighting back ...
and . . . by his fighting back the tendencies were diverted and
the 'forms of development' were themselves developed in
unexpected ways.26

It is not only that gross historical materiality stubbornly


refused to 'correspond' to the purity of its concept ... for in
every historical now the circuit of capital is being obstructed
and resisted at every point - as men and women refuse to be
reduced to its trager . .. so that the 'forms' are 'developed' and
diverted in theoretically improper ways by the class struggle
itself.27

The conclusion that Thompson draws is that the so-called 'laws


of motion of capital' are not laws at all and that the history of
capitalism must be understood as a ~rocess involving the exerting
of pressures and counter-pressures. 8 But as I have shown in this
chapter, this seeming contradiction does not compel us to either
abandon the law of value or force history into the Procrustean
bed of the law of value.
Historical Analysis of Capitalism 133

6 CLASS AND CLASS STRUGGLE

Historical analysis must concern itself with class and class


struggle, but the recent politicist orthodoxy has tended at times to
make class struggle the basis of all inquiry. It is therefore
important for me to show why the Uno/Sekine approach opposes
this position while maintaining that class struggle is an important
factor in historical change. I shall in particular argue against the
subjectivist position that claims the priority of class struggle over
class in the sense that a class only exists in so far as it is created by
class struggle.
In a purely capitalist society classes are simply 'personifications
of economic categories' because reification is presumed to be
complete. The capital-labour relation is thus objectively defined
by the law of value, and by understanding the dynamic between
capital and labour at this level of analysis, it is possible to
understand the objective ground of class struggle even though
there is no class struggle. Further, I want to emphasize that this
objective determination of class is purely economic since at this
level the political and ideological are simply passive superstruc-
tural forms that cannot convert commodified social categories
into social agents or social actors capable of defying the law of
value. At the level of pure theory classes are conceptualized as
objective economic categories. As a result of the law of value, we
understand some important things about capital and labour.
First, we understand the fundamental antagonistism between the
classes of capitalism with the one producing all surplus value and
the other appropriating all surplus value. The consequence of
labour-power being a commodity treated like any other com-
modity input into the production process is clarified. The
necessity and function of an industrial reserve army and the
impact this has on the working-class is brought out. We
understand the nature of machine production and the necessary
revolution in the means of production and how both impact on
the capital-labour relation. We can see the mechanism of
concentration and centralization as well as the mechanisms of
periodic crisis, and as a result understand the impact of these
dynamics on the class relation. Finally we can grasp the expansive
nature of capitalism and its consequences for class. We under-
stand all of this directly from the law of value and not from class
134 Political Economy

struggle. In fact the law of value gives us a good understanding of


why class struggle is likely to occur and at what points, and it
achieves this only by the suspension of class struggle that follows
from allowing reification to complete itself.
At the level of stage theory we can begin to analyse the state and
ideology with interventionist capabilities in connection with
stage-specific· dominant types of capital accumulation. This
demonstrates that class structure varies between different stages,
and that there is only a general capitalist tendency towards a two-
class polarization through the stage of liberalism. The 'working-
class' is not some sort of constant given, but varies considerably
even at the level of stage theory which only looks at dominant
abstract-types. In the stage of mercantilism the 'working-class' is
the rural domestic workers of the putting-out system. In the
liberal stage, the 'working-class' is the industrial proletariat, and
in the imperialist stage, the 'working-class' becomes a stratified
complex structure which spans the monopoly and competitive
sectors, and might be seen to include parts of a fledgling service
sector. At the level of stage theory our analysis of class is still
structural, but by bringing in the dominant political and
ideological forms, we are setting the stage for a much more
complex analysis at the level of history where we may want to
analyze classes mainly as historical actors. In saying that the
industrial proletariat is the dominant form of the working-class in
the liberal stage, we are only saying that this is the structural form
necessitated by the dominant type of capital accumulation, and
we are not saying that the majority of all working people are in the
industrial proletariat even as when the stage ofliberalism reached
its purest expression in Britain in the 1860s. Thus it is perfectly
consistent with our approach for the dominant type of working-
class to be the industrial proletariat, but for this type actually to
contain a minority of the population. This only goes to show that
the dominant type of capital accumulation is not ubiquitous, but
is, in the words of Bukharin quoted earlier, 'the conductor in the
concerto of economic forms'.
The analysis of class structure at the levels of pure theory and
stage theory sets the structural constraints for understanding
class as agency, but tells us nothing about which groups actually
get organized and assert power in the political arena. We need to
study actual class struggles in particular places at particular times
as class structures struggling to be born as classes with real power.
Sometimes classes will not succeed in organizing themselves as
Historical Analysis of Capitalism 135

historical actors or will be only weak actors; at other times they


will play a decisive historical role.
The objective meaning of 'class' is derived from pure theory
and the only pure classes in capitalism are capital, labour and
landlords in the context of a purely capitalist society. Capital and
labour conceived at this level of analysis serve as an objective
referent for clarifying issues concerning class and class struggle at
more concrete levels of analysis. I categorically oppose the
subjectivist claim that class struggle is prior to class. If we start
with class struggle, then we are really starting with collectivities in
struggle since we do not yet know what a class is. Now
collectivities in struggle are of many types, so how do we know
which collectivities succeed in constituting themselves as a class
except in so far as they call themselves a class? Then any
collectivity that calls itself a class is a class, and 'class' has no
meaning except as a name that a group gives to itself. In my view
the Marxist conception of class should be objectively defined by
the economic structure of pure capitalism, otherwise a class is any
economic power-group that calls itself a class while managing to
assert its interest in the political arena; and any group that does
not get itself organized and does not call itself a class is therefore
not a class. But this seems a very inadequate and SUbjectivist
approach to class analysis.
The approach to class analysis that I am advocating starts with
an objective economic definition of class and then by developing
determinant relations between the economic, political and
ideological and between levels of analysis, enables us to re-
integrate the political and ideological in a controlled fashion as
we move towards the concrete, so that we can at the same time
integrate structure and agency. In my view it is inadequate to
claim that 'the structured totality of economic, ideological, and
political relations constitutes at each moment of history the
conjuncture of class struggles, these struggles in tum have the
effect of transforming or preserving these relations,.29 This is like
saying everything is related to everything else, and in changing it
determines everything else. This quote from przeworski is
vacuous, and does not help much in establishing determinant
relations in the real world. The problem with Przeworski's
approach is that he so emphasizes process as opposed to
structure that class disappears in the protean flux of pure struggle
and pure process.
The study of working-class history is a very important part of
136 Political Economy

the study of capitalist history especially in the face of the silence of


so much bourgeois history when it comes to class or the struggles
of oppressed groups. It is important to understand that workers
have not simply been passive victims of exploitation and oppres-
sion, but have actively fought back. But it is also important not to
romanticize about the great victories of the popular forces.
Wishful thinking would like to see the working-class victorious
and therefore reads into capitalist history a degree of working-
class triumph that makes it difficult to understand why socialism
was not realized long ago. As long as capitalism lasts, the
working-class may win some concessions from capitalism, but if it
wins major concessions, we are talking about the transition to
socialism. It would be wishful thinking in the extreme to see the
working-class determining the course of history in advance of
socialism. Class struggle is more important in explaining the
advent of the ten-hour day than in explaining the advent of World
War I. Instead of simply assuming the primacy of class struggle,
we need to determine the actual role of class struggle in
determining various historical events whether it is primary,
secondary, tertiary or negligible.
On the surface, the major problems with a good deal of
Marxian class analysis are economism and workerism. But in my
view these are the surface manifestations of the deeper-lying
logical-historical method. The problem is that by applying the
laws of motion of capital too directly to history, researchers
expect something too close to the two-class polarization of a
purely capitalist society. Marxists too often look for homogen-
eous class-conscious entities where there are none, and make the
mistake of speaking about the capitalist class or the working-
class. We trace all major political and ideological phenomena
back to determinant classes as though they were homogeneous
self-conscious entities, instead of what they usually are, which is
heterogeneous and groping conglomerates. Laclau and Mouffe
have correctly called this 'class reductionism' and have traced
many strategic errors to such ways of thinking.
The theory of a purely capitalist society shows that we should
understand class in relation to the production and appropriation
of surplus. Class is one basis upon which people unite to assert
their common interests and the clearest case of class is the
capital-labour relation in pure capitalism. At the level of history
there is only a tendency towards this two-class polarization to the
Historical Analysis of Capitalism 137

extent that history approaches pure capitalism and the law of


value achieves total hegemony. Though there is a tendency
towards self-purification in capitalist history, the further advance
of this tendency is blocked once we reach the stage of imperialism.
From this stage on, we should expect classes to become less
homogeneous and more complex. In the phase of transition with
the further undermining of capitalism's inner logic, there would
be no further world-historic tendency for the capital-labour
relation to become more polarized or for capital and labour to
become more homogeneous.

7 CONCLUSIONS

Historical analysis is especially important to Marxists because


future-oriented historical analysis is the basis of strategic think-
ing. If our historical analysis has problems, in all likelihood so will
our strategy. In my view serious strategic errors have been made
by Marxists throughout the history of the Marxist movement
primarily because of the logical-historical method or an uncons-
cious and simplistic view of the relation between the logical and
the historical in the theory of capitalism. The effort to grasp
history as a direct function of the law of value produces crude
economic determinism. The reaction against such determinism
generally produces a voluntarism which posits the primacy of
action and struggle. The tendency to see a degree of necessity at
the level of historical analysis that is only possible at the level of
pure theory produces dogmatism. The tendency to see the two-
class dynamic of pure capitalism at the level of historical analysis
produces class reductionism. Closely connected to class reduc-
tionism is workerism which fetishizes the working-class as the
agent of change and sees working-class power everywhere far in
advance of actual socialism. The failure to understand the
determinant relations between the economic, the political and the
ideological and between levels of analysis can produce tenden-
cies to collapse them all together into a vague culturalism or to
treat either the political or ideological as dominant as in
politicism and ideologism. All of these errors stem ultimately
from the logical-historical method and they all lead ultimately to
bad strategy.
For socialists the goal must be the most effective mass
138 Political Economy

mobilization of people possible with the aim of achieving


democratic socialism. Theory can be a great aid in clearly
understanding the historical context, the realistic possibilities for
change and the weak points of the system. Of course when dealing
with concrete conjunctures, experiential or practical wisdom is
important. But strategy is bound to be weakened by any of the
errors that I have mentioned because they all lead to approaches
that are in some sense one-sided and incomplete. If we combine
economism, dogmatism and class reductionism we get the sort of
errors that were typical of both the Second and Third Inter-
nationals and in the extreme we get Stalinism. If we adopt any of
the varieties of voluntarism, we give up the guidance of the law of
value and place our faith in the spontaneity of the people or the
working-class to bring about socialism. In its extreme form this is
anarchism. Of course, the SUbjective factor is extremely impor-
tant in the transition to socialism, but to give up the guidance of
an objectively grounded social science could have disastrous
results.
Throughout this chapter I have referred to the 'determinant
relation between the economic, political and ideological'. but so
far I have not really expanded on this problem. So in the next
chapter I shall discuss the nature of capitalist superstructural
forms and how they are concretized in a levels of analysis
approach.
6 The Theory of the
Capitalist Superstructure
The analysis of the capitalist superstructure should start with
achieving clarity on the precise sense in which the capitalist state
and ideology are capitalist. This, of course, requires that I have
already clarified the meaning of 'capitalism'. Since this was the
primary aim of the previous five chapters, I now proceed from
this foundation to analyse the capitalist superstructure. In order
to do this it is necessary to clarify the relation between the
economic, the political and the ideological at each of the three
levels of analysis.
I believe that for many readers it will be especially this chapter
that brings out most forcefully the important contributions of the
Uno/Sekine approach. But it is also with this chapter that I
develop the most significant innovations.
Besides the nearly ubiquitous logical-historical method,
another reason why the economistic tendency was so strong in
orthodox Marxism was because of the strong impact of Marx's
Capital. In Capital Marx sets forth the law of value without
developing a theory of politics or of ideology based on the law of
value. This meant that the law of value (the economic) was very
often directly applied to history resulting in economism. Or
sometimes it has meant that the ideological and political have
been tacked on to the economic in ad hoc ways. As we shall see
later there are hints in Capital about the nature of the capitalist
superstructure. But if we want to avoid economism, it is necessary
to root the theory of the political and ideological in the law of
value. This is because the law of value depends upon reification,
upon the domination of objects in motion over the subject, the
individuals of human society. But if total reification makes the
object totally subsume the subject, that does not mean that the
subject disappears. The subject is neutralized in a purely capitalist
society, but it re-emerges as we move to more concrete levels of
139
140 Political Economy

analysis. Now the economic in the form of the law of value


represents the domination of the commodity or of the object, but
to complete the picture we need a theory of the subject, even if in a
purely capitalist society the subject is merely a bearer of economic
structures. The subject is passive, but is still present, and it is this
passive presence of the subject that provides the basis for deriving
a theory of basic superstructural forms.
The approach of the Uno School does not preclude deriving a
theory ofthe superstructure in a purely capitalist society, but the
work of Uno, Sekine and Itoh tends to focus mainly on the law of
value and Marxian economics. Sekine's Dialectic of Capital
demonstrates that the objectification of social relations con-
sequent on the completion of reification in a purely capitalist
society makes it possible to theorize the inner logic of capitalism
as a rigorous dialectic. But the objective economic categories
require that subjects play the role of passive support. To be more
concrete, the commodity implies commodity-owners. The com-
modity-owner first appears in the dialectic of capital as an active
subject proposing an exchange. As the dialectic proceeds the
subject is increasingly converted into a passive bearer of econ-
omic categories, but never disappears and always retains a
freedom as consumer that makes assumptions such as 'fixed
baskets of wage-goods' unrealistic. A purely capitalist society is
one where socioeconomic life is governed in its totality by the self-
regulating market. Socioeconomic life is therefore not governed
by the political and ideological. And yet a purely capitalist society
is made up of individual subjects, and based on the nature of
subjecthood necessitated by pure capitalism, we can begin to
grasp the most fundamental forms of the state and ideology. The
dialectic of capital is not complete without a theory of superstruc-
tural forms because without such a theory it is only a theory of the
objective side of social relations without the corresponding
subjective side. And even though the subjective side consists of
relatively passive forms at the level of pure theory, these forms
must be precisely grasped if we are correctly to theorize the state
and ideology as they become more active and concrete at the level
of stage theory and historical analysis. Until this subjective side is
adequately theorized from the level of pure theory where it is
relatively passive, to the level of historical analysis where it is
relatively active, the approach of the Uno School to political
economy will tend to display economistic tendencies and tenden-
Theory of the Capitalist Superstructure 141

cies to theorize the political and ideological in somewhat lose and


ad hoc ways. 1 I hope that this chapter in attempting to ground the
political and ideological at the level of pure theory will make a
significant contribution to the Uno School and will serve as a
corrective to the possible economistic tendencies in the present
formulations of pure theory.
The 'base/superstructure' metaphor has been so strongly
attacked and discredited in recent years, that in trying to resurrect
it, I may be accused of waving a red flag at a bull. In what follows
it will become clear that I consider the 'base/superstructure'
metaphor an accurate concept only in the case of a purely
capitalist society. But because in this case capitalism is most fully
itself, the 'base/superstructure' concept yields important insights
into the essential character of capitalism even though at the level
of historical analysis we should remember its metaphorical
character and hence use it only as a rough guideline.
Another reason for using the term 'superstructure' is that it
refers to both the political and the ideological, and it is my view
that at the most abstract level of a purely capitalist society the
political and ideological overlap in basic superstructural forms.
This is important because Marxists have very often constructed a
theory of the state or of ideology too separate from each other,
and this tendency can be countered by theorizing their common
roots in the superstructural forms where the political and
ideological are not yet clearly differentiated. Thus the theory of
the superstructure analyses the political and ideological in their
interconnectedness, paying attention to the differentitation from
a common root.

1 THE SUPERSTRUCTURE IN A PURELY


CAPITALIST SOCIETY

If a purely capitalist society is totally self-contained and is


governed by the law of value working through the market, then
how can we derive the basic superstructural forms? At this level of
analysis the dialectic of capital shows us how the motion of value
completely subsumes economic life without any outside help so
that the political and the ideological can play no direct or active
role in the dialectic of capital. In this sense the theory of a purely
capitalist society is a theory of the economic base and at the same
142 Political Economy

time is a theory of a social totality because in this instance the


reproduction of social life is governed by the economic alone. But
we know that any really existing society is in part governed by the
state and ideology. The question, then, is: how can the theory of
pure capitalism, which objectively reveals what capitalism must
be, help us to undestand the specifically capitalist political and
ideological forms?
Since with a purely capitalist society, capitalism has been
allowed to become most fully itself, this must be our reference-
point for understanding what capitalism is in its inner essence. It
follows that those state and ideological forms which are implied
by a purely capitalist society and are consistent with such a society
must be the forms most characteristic of capitalism. At the level of
stage theory we may analyse the ideological and political forms
most characteristic of mercantilism, liberalism or imperialism. At
the level of historical analysis we may analyse the political and
ideological forms most characteristic of France in 1848 or
Germany in 1937. But it is only at the level of pure theory that we
can fix upon the basic character of capitalist, political and
ideological forms in general. If, then, we are to speak of the
'capitalist state' and 'capitalist ideology', we must ground these
concepts in the theory of a purely capitalist society. Otherwise
'capitalist' can have an indefinite number of possible meanings. I
have argued throughout that 'capitalism' has one objective
meaning and that is the meaning revealed by the law of value
which so far has been most rigorously stated by Sekine in The
Dialectic of Capital.
The analysis ofthe state and ideology at the level of pure theory
can be referred to as 'form analysis'. Here I am using 'form' in
contrast to 'content' or 'substance'. At the level of pure theory the
state and ideology are not embodied in material institutions,
which, as material institutions, would have an independent
capability to intervene in the economic. Materiality is totally
subsumed to the motion of value, so that the state and ideology
can only be theorized as passive forms or background conditions,
shadows implied by the objectified motions of social relations.
These abstract forms only take on material institutional content
with the re-emergence of the subjective element at more concrete
levels of analysis. Thus, for example, at the level of pure theory
the basic capitalist state form is the rechtsstaat. 2 At the level of
stage theory this abstract-form takes on definite material content
Theory of the Capitalist Superstructure 143

which differs between various stages of development. Further, the


dominant material-types of political and ideological institutions
at the level of stage theory serve as guides to the specifics of
historical/empirical analysis. Thus from form analysis at the level
of pure theory, it is necessary to develop the material content of
the state and ideology as we move through levels of analysis to the
concrete.
Often in the pair form/content, we think that the form is less
important than the content. Not so in this case. What makes the
state and ideology capitalist is not any specific content, but only a
specific form. The capitalist state is primarily a form. Capitalist
ideology is first and foremost a form. And these forms are
absolutely crucial to understanding the state and ideology at
more concrete levels of analysis. It is under the aegis of these
abstract forms that the material institutional content develops
and that we understand the capitalistic character of that content.

The Objective and Subjective in a Purely Capitalist Society

Marx points out that while capital may be conceived as the 'self-
expansion of value' taking on an existence and motion of its own,
the insurmountable fact remains that 'commodities cannot go to
market and make exchanges on their own account' .3 The
commodity-form entails the category 'subject' because com-
modities do not exchange themselves but instead must be owned
by a subject 'whose will resides in those objects' - commodities
have no will of their own until they conspire collectively in the
market place to form prices and rates of profit which in tum
govern society. But in order to get to the market, they must first
be produced and secondly appropriated as someone's private
property. Thus the commodity connects autonomous subjects
through exchange; indeed, more than just connecting, it actually
regulates social relations so that from the point of view of the
market, ' ... persons exist for one another merely as represen-
tatives of, and therefore, as owners of, commodities,.4
The self-regulation or objectivity of the market requires that
the subject should be unable to intervene and alter the objective
workings of the market. This means that the subject must be split
off from the objective, and in this case the splitting off takes the
form of isolated subjects that relate to each other only through
144 Political Economy

commodity exchange in the market-place. Each subject is


privatized to be a little sovereign over the private property that he
or she owns. This means that inter-subjectivity can only be
created through the commodity which connects one isolated
subject with another. There is no socioeconomic inter-subjectivity
based upon direct relations between persons in a community or
society. What we end up with, in the succinct words of Marx, are
'material relations between persons and social relations between
things'. This materialization, this naturalization, this objectifica-
tion of social relations is achieved through a commodification of
social relations that establishes objectivity by banishing the
subject to the private realm where his powerlessness in the face of
market forces is made up for by making each subject a little
dictator within the realm of his own property. Thus the basic
superstructural form of pure capitalism consists of isolated
subjects confronting an objectivity which depends upon their
remaining isolated subjects connected only by commodities.
With capitalism we have the following paradoxical situation.
The subject (person) owns the object (commodity), but all the
objects are exchanged and in the process a self-regulating market
is created which governs the economic activity of the subject. As
commodity-owner the subject has absolute dominion over the
commodities owned, and yet the price of those commodities is
totally dependent on a society-wide market over which the subject
has no control. In relation to his commodities the subject is totally
dominant, and in relation to the market the subject is totally
subordinant. This domination of the circulation of commodities
or the market over the subject is a principal aspect of 'reification'.
It seems as though the market is sovereign and at the same time
the individual is sovereign. When we emphasize the objective side,
we adopt a deterministic or fatalistic view of society; and when we
emphasize the subjective side, we tend towards a voluntarism that
thinks any individual can be what he or she wills.
In a purely capitalist society the complete domination of the
commodity (the object) over society makes the law of value seem
to be eternal and natural so that the law of value seems to be like a
natural law. Marx took great pains to analyse the fetishism of
commodities which in his view was the material basis for most of
the misconceptions of bourgeois economics. Because of the
fetishism of commodities, bourgeois economists tend to view the
reign of things over humans as natural and fail to see the social
Theory of the Capitalist Superstructure 145

relations underlying the motion of things. As a result they do not


see that capitalism is a historically limited mode of production,
and they do not see the potential problems created when social life
is governed by prices and profits. Fetishism of commodities is
based on the truth that the market governs, but this perspective is
a partial truth which fails to see the underlying sociohistorical
limitations and contradictions of such a situation. Thus Marx's
Capital develops the law of value out of a critique of classical
political economy, which was prone to error because of its failure
to see through the fetishism of commodities. The fetishism of
commodities is dispelled theoretically once we see the exploita-
tion of wage-labour that underlies the formation of profits and
prices. But, of course, at the level of everyday life the fetishism of
commodities continues to have ideological effects as long as
capitalism lasts. These effects tend to hide class exploitation by
focusing on the market with its seeming objective and impersonal
fairness. The fetishism of commodities or of the object is one basic
form of capitalist ideology.
The second basic form, and the more important for deriving the
theory of the superstructure, is the fetishism of the subject. The
fetishism of commodities that Marx analysed at such lengths in
Capital has as its counterpart the fetishism of the subject. The
fetishism of the commodity or of the object makes capitalism
appear to be natural or eternal and therefore not alterable by
human agency; whereas the fetishism of the subject fails to see the
reification of capitalism and sees capitalism as therefore the
product of sovereign individuals. The fetishism of commodities
accepts the domination of things over human beings by accepting
total reification as so natural that it becomes unnecessary to
translate material-technical economic categories back into their
underlying social relations. Social facts appear as natural facts.
This is convenient to the bourgeoisie, who, as a result, do not have
to take responsibility for the problems of society.
The extreme voluntarism generated by the fetishism of the
subject is even harder to combat than the fatalism generated by
the fetishism of the object, and this is because the commodity-
form sharply accentuates the predisposition for individuals to
experience themselves as the centre of power in their own lives.
This form offetishism sees the subject as sovereign over his or her
property and therefore sovereign over his or her life. Each subject
is a self-sufficient monad with a sovereign wilL The superstruc-
146 Political Economy

tural forms deriving from this category 'subject' are more


prevalent and harder to combat than those deriving from the
category 'object', because they are so deeply embedded in
everyday life and the very identity of individuals in a capitalist
society.
If it is roughly accurate to say that capitalism is a historically
delimited mode of production which tends towards reification,
then the fetishism of the subject is even further removed from this
actuality than the fetishism of the object. Object fetishism
accurately sees the domination of things, but accepts this as
natural and eternal; whereas the fetishism of the subject not only
fails to see the domination of things over men, but tends to see
whatever objectification that exists as the direct product of
subjective and sovereign wills. This position of extreme voluntar-
ism seems further removed from the reality of capitalism than its
fatalistic objectivist counterpart. The peculiar nature of the
fetishism of the subject under capitalism is crucial for our
understanding of the basic superstructural forms.
The objective moment of a purely capitalist society is the
economic, and I have argued that the economic, because of the
fetishism of commodities, gives rise to one form of capitalist
ideology. The second basic form of capitalist ideology derives
from the fetishism of the subject, and it is this peculiarly capitalist
category of subject that is the basis of the capitalist political form.
It is with this fetishized category of subject that we come to see the
common root of that capitalist ideology which arises from the
subjective moment of a purely capitalist society and the basic
capitalist political form. There are many excellent studies by
Marxists on the fetishism of commodities as a basic capitalist
ideological form, but few have explored the subjective side of the
antinomy. Let me tum next to analyse the fetishism of the subject
as a basic capitalist ideological form.

The Legal Subject and Capitalist Ideology

C. B. Macpherson's Political Theory of Possessive Individualism is


an important contribution to the analysis of the subjective side of
capitalist society, but by far the most important work to date is
Pashukanis's Law and Marxism: A General Theory.5 I believe
Pashukanis was essentially correct in arguing that the most basic
form of the fetishism of the subject is the 'legal subject'.
Theory of the Capitalist Superstructure 147

A legal subject is a person with rights on the basis of which hel


she actively makes claims. 6 Basing his argument on the following
passage from Marx's Capital, Pashukanis claims that the com-
modity-owner in a capitalist society is the paradigm case of the
legal subject:

It is plain that commodities cannot go to market and make


exchanges of their own account. We must, therefore, have
recourse to their guardians, who are also their owners.
Commodities are things, and therefore without power of
resistance against man. If they are wanting in docility he can
use force; in other words, he can take possession of them. In
order that these objects may enter into relation with each other
as commodities, their guardians must place themselves in
relation to one another, as persons whose will resides in those
objects, and must behave in such a way that each does not
appropriate the commodity of the other, and part with his own
except by means of an act done by mutual consent. They must,
therefore, mutually recognize in each other the rights of private
proprietors. This juridicial relation, which thus expresses itself
in a contract, whether such contract be part of a developed
legal system or not, is a relation between two wills, and is but
the reflex of the real economic relation between the two .... The
persons exist for one another merely as representatives of, and
therefore, as owners of, commodities.?

This passage makes it clear that commodity exchange implies


legal subjects 'whose will resides in those objects' (commodities)
and who carry out exchange only by 'mutual consent'. If in a
purely capitalist society 'persons exist for one another merely as
representatives of, and therefore, as owners of, commodities',
then it follows that in the first instance persons are defined as legal
subjects. A legal subject is a property-owner with exclusive rights
to the property owned, who therefore only parts with his or her
property through consent.
The legal subject is an abstract and impersonal atom existing in
a society of traders connected by the commodity and by the
mutual recognition of abstract subjecthood with right. Each act
of exchange implies as a 'passive reflex' a relation between
subjects with property rights and at least an unspoken contract to
exchange only through mutual consent. Since in a totally reified
society there are no direct economic relations between persons,
148 Political Economy

there can be no sharp distinction between law of property and law


of contract. Law of contract is simply law between persons whose
relation is mediated by property. Since society is totally governed
by the market, law is simply a passive background condition.
Legal regulation only comes to the fore in so far as disputes
between property-owners arises due to some perceived breach of
property right or contract. Commodity-owners buy and sell, and
each transaction is also a legal relation involving a contract
between subjects with rights. In the normal course of trade the
legal relation remains a passive background condition, but if a
perceived breach of contract occurs, the legal relation comes to
the fore in the form of litigation between le$al subjects claiming
their rights. 8 According to Pashukanis:

The legal system differs from every other form of social system
precisely in that it deals with private, isolated subjects. The
legal norm acquires its differentia specijica, marking it out from
the general mass of ethical, aesthetic, utilitarian, and other such
regulations, precisely because it presupposes a person endowed
with rights on the basis of which he actively makes claims. 9

It is the legal subject that is prior to the moral subject and even to
the egotistical subject or 'possessive individual'. Individuals in a
purely capitalist society are first and foremost proprietors whose
wills reside in their commodities which connect them in the
market-place and regulate them through prices and profits. This
means that an individual's very sense of selfhood and identity
develops within the form of the legal subject. According to
Pashukanis, 'The egoistic subject, the legal subject and the moral
personality are the three most important character masks
assumed by people in commodity-producing society.'10 I would
add to this that the legal subject is the fundamental 'character
mask' of these three, and indeed it is a good deal more than a
character mask since it is the basic form within which the
individual's character and identity develop. And this is because in
a purely capitalist society, individuals are first and foremost legal
subjects - their essential being is defined by their legal subject-
hood. In the language of structuralism, individuals are 'inter-
pellated' as legal subjects.
It is now apparent that the commodity-form is the basis of both
objectivist and subjectivist capitalist ideological forms. The
Theory of the Capitalist Superstructure 149

reified relation between object and subject creates both the


fetishism of commodities and the fetishism of the subject. The
basic form taken by fetishized subjectivity is the legal subject. The
legal subject capable of property-ownership and commodity
exchange is the most important superstructural form of capital-
ism, or in the words of Pashukanis: 'in capitalist society ... legal
ideology becomes the ideology par excellence'. II According to
Marx the economic cell-form of capitalism is the commodity-
form, and according to Pashukanis the superstructural cell-form
of capitalism is the legal form. Later I shall show the sense in
which it is a hybrid, serving as both the embryonic political form
and the most important embryonic ideological form.
Though grounded in the commodity exchange between
subjects, legal ideology spreads widely throughout capitalist
society because 'the most diverse relations approximate the
prototype commercial relation and hence assume legal form.,12
Thus, for example, even one's reputation can be considered a
commodity, and those who trespass against it can in some
circumstances be charged with libel or slander. Thus 'if all
economic life is to be built on the principle of agreement between
autonomous wills, every social function, in reflecting this,
assumes a legal character'. 13
The reification of social relations gives rise to fetishism of
commodities and at the same time to legal fetishism.

The social relation which is rooted in production presents itself


simultaneously in two absurd forms: as the value of com-
modities, and as man's capacity to be the subject of rights. 14

The abstract capacity of everyone to be a bearer of property


rights makes it difficult for bourgeois thought to see anything
else than subjects with rights: legal fetishism complements
commodity fetishism. 15

Both forms of fetishism can be overcome by the de-reification of


economic life in which society takes full responsibility for
economic life so that the relation between subject and object that
counterposes isolated and formally free subjects to the iron
necessity of the laws of motion of capital begins to break down. 16
The reader may wonder why in all this analysis of the
fundamental ideological forms of capitalism, there has been no
150 Political Economy

mention of class and class struggle. The reason is that the basic
ideological forms of capitalism do not recognize the existence of
class. Like any dominant ideology, capitalist ideology in its basic
forms must present itself as universal. Indeed the very legitimacy
and rationality of capitalist society depends heavily on the non-
recognition of class. In a purely capitalist society, where the
commodification of labour-power is completely secured, capital
treats labour-power the way it treats any other commodity.
Capitalist ideology does not distinguish between those com-
modity-owners who own capital and those who only own their
labour-power. All individuals in a purely capitalist society are
commodity-owners, and as such they are all equally legal
subjects.
Capitalist ideology derives from the realm of circulation and
not from the realm of production, because even in a purely
capitalist society, when we look closely at the realm of produc-
tion, we see class and we see the potential for class struggle. But
capitalist ideology sees capitalist society made up oflegal subjects
and not of antagonistic classes. It does so by basing itself on the
universalization of the commodity-form. Marx seemed to recog-
nize the importance of the realm of circulation to capitalist
ideology when he referred to the realm of circulation as 'a very
Eden of the innate rights of man. There alone rule Freedom,
Equality, Property and Bentham' .17
Of course, as Marxists we can argue that viewing the world in
non-class terms is in the interest of the capitalist class. But saying
this does not get rid of the commodity-form and the legal subject.
And it is their continual reproduction that provides a realistic
basis for capitalist ideology. Unless we fully understand this, we
will not understand the real strength and appeal of capitalist
ideology. Such understanding is essential to combating the
powerful hegemony of capitalist ideology. In a purely capitalist
society subjectivities are not interpellated as class subjectives at
all. Capitalism in general primarily creates legal subjects as
possessive individuals so that class-consciousness is secondary
and must always struggle against the primary ideological forms.
Furthermore, at the level of stage theory and historical analysis it
is apparent that the class composition of capitalist society is
always complex, that groupings other than class must be taken
into account and finally that ideological forms do not necessarily
have a 'class belonging'. 18 These conclusions can have important
Theory of the Capitalist Superstructure 151

strategic implications. For example, in most cases it is likely to be


futile simply to assert class solidarity or community in opposition
to individualism. If individualist ideologies are hegemonic, then
the Left is likely to have more success if it demonstrates how
capitalism cripples the development of the individual.
Let me briefly summarize this section. The universal hegemony
of the commodity-form in a purely capitalist society gives rise to
two basic ideological forms: the fetishism of commodities and a
corresponding fetishism of the legal subject. While these two
fetishisms represent the two sides of an object/subject antinomy
and therefore mutually support one another, it is especially the
legal subject that is important and that has not been adequately
studied in the past by Marxists. I have claimed that the legal
subject is the most important of the two basic capitalist
ideological forms. The next section will support this claim by
showing that the legal subject is the basis for deriving the
capitalist state form.

The Legal Subject and the Capitalist State

It is the superstructural form legal subject that is fundamental to


the derivation of the basic form of the state at the level of pure
theory. In its embryonic form the state form is a legal subject
raised about the rest or in other words the legal subject writ
large. 19 If a purely capitalist society is made up of legal subjects,
then the state form must be a form that legal subjects can create. It
would be contradictory for the state to have the right to invade
the property of its subjects. All legal subjects can do is create
through the mutual consent of a social contract, a special legal
subjectivity capable of resolving disputes between legal subjects
and of protecting their property. Such a neutral judge is one legal
subjectivity raised above the rest with the right to settle disputes
and protect property. If each legal subject must protect his own
property with his own weapons, there is always a threat of a
Hobbesian war of all against all. Such a Hobbesian state of nature
would destroy the category 'legal subject' because legal subjects
must only relate to each other through consent. To ensure
exchange according to universal consent and the universal
arbitration of claims, each legal subject gives up the right to use
force to protect his property so that the state is given a monopoly
152 Political Economy

of force to enforce the law. The state as legal subject writ large
may also find it necessary to interpret the law from time to time,
and this we may call 'law-making'. The basic state form is an
abstract Legal subject realised above other legal subjects by a
contract which gives the state the right to adjudicate disputes, to
make or interpret laws only for the protection of property and to
monopolize the legitimate use offorce to enforce the law. Though
having the definite form of legal subject, made primus inter pares
(first among equals) by mutual consent, the state becomes a
peculiar type of legal subject. Legal subjects have more or less
absolute control over their property to sell, to hoard or to destroy;
but of course the legal subject as state does not have property
rights over its subjects since that would mean that it could use
force at any time to invade their property and this would destroy
the entire raison d'etre of the sovereign state. In a purely capitalist
society, the sovereign state must therefore be completely divorced
from property-ownership and from the economic and must
instead be simply the passive regulator of the relations between
legal subjects. In its embryonic form the state must not have the
capacity to intervene into the economic arena, and this is ensured
by the state's use of force being entirely extra-economic and
therefore extending only to the enforcement of property law.
Since force is removed from the economic, the state becomes a
kind of repository of extra-economic force.
Let me summarize the argument to this point and take note of
the basic characteristics of the political or the basic state form in
pure capitalism. The commodity-form posits legal subjects as the
passive reflex in the circulation of commodities. But the category
'legal subject' is very tenuous in a situation where each must
defend property against all others. A sovereign state is therefore
necessary really to secure individuals in the status of legal
subjects. Without a state the category 'legal subject' can easily
dissolve for it depends only on mutual recognition. But the state
cannot be so powerful that it can infringe on the economic; it
cannot represent any collective or communal will. Legal subjects,
whose only connection in the first instance is commodity
exchange, cannot produce a 'general will'; they are only capable
of creating a legal subjectivity which by mutual consent stands
above other legal subjects in being able to mediate disputes
between them to ensure that the peace of mutual consent does not
degenerate into a war of all against all. In the first instance the
Theory of the Capitalist Superstructure 153

state is therefore the passive reflex of legal subjects needing to


maintain their status as legal subjects. It is a superstructural form
that is derived as a passive reflex from the economic base. The
state is also entirely separate from the economic base in the sense
that it represents a legal subjectivity entirely divorced from
property-ownership.
In a society of legal atoms, the unifying element is in the first
instance the market, for it is primarily the commodity that
connects legal subjects into a cosmos as opposed to a chaos. Three
is no community based upon direct human relations; the only
connectedness is based on the commodity and the market. But
this also means that the basic state form cannot arise out of any
sort of political collectivity or community; indeed, if it did, it
would threaten the sovereignty of the market. There cannot be a
real public realm arising from a political community. The 'public'
as opposed to the 'private' is created by raising a legal subject
above the rest and abstracting it from direct property-ownership
so that it can play the role of mediator between legal subjects. The
public realm is essentially a legal fiction for the sake of smoothing
the intercourse in the private realm. The sole purpose of the
public realm is to protect the private property and inwardness of
the legal subject; the public realm is therefore artificial and
parasitic off the private realm. When considered more concretely,
such a state of affairs can lead to a vicious circle in which the less
there is any real political community to deal with collective needs
and to provide security, the greater the need for privacy and the
only way of securing needs available - private property.
In a society of legal subjects, all conflict is privatized and
treated as a problem oflaw. Conflict between privatized entities is
settled by a privatized entity made public through a legal fiction
for the purpose of mediating conflicts between privatized entities.
For this reason it is extremely important for the state to be
neutral, and this is achieved by disconnecting the sovereign legal
subject from property. In a purely capitalist society legal subjects
do not have to learn the sort of creative conflict that is required by
real political community since conflict is avoided by encouraging
it to remain within the private realm where it can be resolved by a
neutral judge.
This analysis has demonstrated that the basic form of the
political in a purely capitalist society is the legal state or the
rechtsstaat. The legal subject is a hybrid superstructural form in
154 Political Economy

the sense that it is the common source of both the capitalist state
form and the most important ideological form. It follows that the
capitalist state form is very closely connected to the capitalist
ideological form. The abstract citizen of the capitalist state is
basically a legal subject, and as a rechtsstaat, the capitalist state is
dependent on the legal subject and legal ideology for its
legitimacy.
Just as with the basic ideological forms, the basic state form
does not recognize the existence of classes. The capitalist state
form must be derived from the legal subject posited by the
circulation of commodities and not from the realm of production
where class always lurks behind the factory walls. In a purely
capitalist society the legal state is a passive background condition
that serves only to resolve disputes between legal subjects in order
to secure the legal subject status of commodity-owners. At more
concrete levels of analysis with the re-emergence of the active
subject and agency, it becomes apparent that the state usually
does serve the interests of the dominant fraction of capital in so
far as it is clear about what those interests are. But this class
content of the capitalist state is always hidden behind the
rechtsstaat form. The success that the capitalist state has had in
appearing to be neutral and in appearing to serve the 'public
interest' is rooted deeply in the reality of the basic superstructural
form, the legal subject.
In order to understand the nature of the political in capitalist
society, it is important to start with the state form and not with
the vague and ubiquitous 'power'. In pure capitalism, society is
completely governed by the market. The state does not exist as an
institutional force capable of intervening in the market, instead it
passively secures the legal subject as a background condition to
commodity exchange. We do not conceptualize the basic state
form in terms of power, rather we understand it as a legal form.
The capitalist state appears as a power-wielding apparatus at the
levels of stage theory and historical analysis, but in order to
understand the capitalistic character of state power, we need to
understand the basic form of the capitalist state. The capitalist
state cannot be adequately understood as simply a repressive
apparatus or as an instrument of the capitalist class. In order to
understand the capitalist state we need to understand the basis of
its legitimacy, and we need to understand the tension between its
rechtsstaatlich form on the one hand and ways and means of
Theory of the Capitalist Superstructure 155

serving the interests of the dominant fraction of capital on the


other. Above all we need to understand that the continuing
appeal of the capitalist state rests on the fact that in its basic form
it is not a class state at all, but a neutral arbiter between abstract
citizens. This tension between the non-class form of the capitalist
state and its class content has sometimes been expressed in recent
theory as 'the relative autonomy of the state'. It is true that the
state is relatively autonomous from class struggle, but we can
never adequately understand the nature of this autonomy if we
start by equating the political with power. Politics then becomes
completely diffuse and indeterminant. It is necessary first to grasp
the capitalist state form and then to explore power relations in
relation to this dominant form. Similarly, it is difficult to make
much headway if our starting-point for understanding capitalist
society is class struggle. Instead, by starting with the law of value,
we can generate a theoretical framework which will enable us
really to make sense out of the forms of class struggle that are
characteristic of capitalism.
All societies have norms and rules, but the legal form is most
characteristic of capitalism. Historically the legal form develops
most fully where the commodity-form develops most fully. That
is why prior to the rise of capitalism the legal form developed
most fully in ancient Rome. Legal ideology only becomes really
developed and hegemonic with the universalization of the
commodity-form under capitalism. With the advent of demo-
cratic socialism neither the market nor the legal form remain
hegemonic, but instead are democratized and humanized. Up to
now socialists have not sufficiently considered the forms of
normative regulation appropriate to democratic socialism or
what speaking loosely might be called socialist 'law'.

Conclusions

In this section I have tried to derive the basic superstructural


forms from the economic relations of a purely capitalist society.
Later in the chapter I shall discuss the development of capitalist
ideology and politics at the levels of stage theory and historical
analysis. But here I want to stress the importance of deriving the
basic superstructural forms at the level of pure theory. If we
cannot arrive at a clear conceptualization of the relation between
156 Political Economy

the economic, political and ideological at the level of pure theory,


then there is little chance of doing so at more concrete levels of
analysis where capitalism is less pure. It is when capitalism is pure
that we can clarify the types of superstructural forms that it
generates. If we neglect these forms at the level of pure theory, our
entire approach will incline towards economism, and instead of
having a conception of determinant relations beween the econ-
omic, political and ideological, the tendency will be to add the
political and ideological on to the economic in an ad hoc fashion.
My analysis has demonstrated that Marx's base/superstructure
metaphor is very felicitous at the level of pure theory. Since a
purely capitalist society is governed by the market, the economic
is indeed the base, and politics and ideology are derived as the
passive superstructure that backs up this base. Ideology is derived
from both sides of the object/subject antinomy created by
reification and politics is derived from the subject side of the
antinomy. The superstructure conceived in this way does not refer
to all ideas and institutions other than economic that might exist
in a purely capitalist society. Rather the superstructure refers
specifically and only to those ideological and political forms
generated by the universal domination of the commodity-form
over social life.
I have argued that capitalist ideology derives from both the
fetishism of the object (commodity) and of the subject. The
economistic ideological form which claims the law of the market
to be a sovereign natural law not to be interfered with needs to be
complemented by the voluntaristic legal form based on the
prenllse that 'a person is juridicially dominant over things
because, as an owner, he is posited as an abstract impersonal
subject of rights in things,.2o Thus in capitalism the individual is
master of his property and the slave of the market - he is master of
his little (or big) island of property, but he is slave to the all-
powerful sea of value relations that engulf his island.
The logical derivations of the state form from the objective
ground of the dialectic of capital tend to be confirmed by the fact
that the stage of liberal capitalism which most closely approx-
imates a purely capitalist society also strives towards the ideals of
free-trade and laissez-faire. Of course at the level of pure theory
we can only derive the abstract and embryonic state form which is
bound to be very far removed from the materiality of any actually
existing historical state. But the similarity between the logical
Theory of the Capitalist Superstructure 157

derivation here and the political theory of such classical liberals as


John Locke is no accident. For example, Locke argues that the
principal task of political thought is to define the law-maker
which is the same thing as government. 21 Further, according to
Locke the primary purpose of all government is the protection of
property, and civil laws are but 'guards and fences' to men's
property.22 Furthermore, for Locke the legitimacy of government
is based on the legal fiction of a contract between legal subjects.
Perhaps the most forceful logical derivation of the state form
from legal subjects in the classical writings is Hobbes's Leviathan
where it is clear that the main function of the sovereign is to secure
possessive individuals in their status as legal subjects. The work of
Max Weber which develops the legal-rational character of
political authority under capitalism also lends support to the
results arrived at here. Finally the legalism of liberal theory and
practice is notorious. 23 Liberals have always as much as possible
converted political problems into legal problems, and have feared
any form of political collectivism or political mobilization that
might interfere with the market or the property right of legal
subjects.
The dialectic of capital demonstrates that a capitalist society
can reproduce itself entirely according to commodity-economic
principles without the intervention of extra-economic force.
However, we can logically derive the basic state form from the
dialectic of capital, even though the state plays no active role in
the dialectic itself. We see clearly that the state and ideology must
be separated from the self-expansion of capital as a passive reflex
that secures the background conditions of the dialectic.
At the level of pure theory, I am trying to conceptualize the cell-
forms of the superstructure as they must exist in a purely capitalist
society. Though very abstract, formal and embryonic, these cell-
forms are crucial for our entire understanding of the state and of
ideology, their relation to each other and to the economic base. I
have tried to show how the legal subject is the basic superstruc-
tural form that gives rise to the political, and how it is this form
along with the fetishism of commodities that gives rise to the
ideological. I have noted that at their root the political and
ideological are not clearly differentiated, so that the basic form of
the capitalist state is both ideological and political. I have argued
that in its basic form the capitalist state is a rechtsstaat or a legal
sovereign. Of course, this does not imply that the capitalist state
158 Political Economy

does not in practice ever do anything illegal, since at this level of


analysis we are only speaking of the cell-form and not the state as
a material reality. Also it should be noted that in its basic form the
capitalist state is a covenant of legal subjects or isolated and
abstract citizens. As such it does not recognize the existence of
classes, and indeed, I may even say that its basic form requires a
total divorce from class. It is not, then, a form derived from the
capital-labour production relation, but instead it is derived from
the commodification of social life including crucially the com-
modification of labour-power.
Finally I should emphasize that the political in the perspective
being developed here must first and foremost be conceptualized
as a legal state form and not as 'power' or as 'class struggle'. These
latter aspects of capitalist politics must be developed at more
concrete levels of analysis and must be understood in relation to
the basic form developed at the level of pure theory. Our whole
understanding of the nature of the political in capitalist society
will be misconceived if we do not grasp the peculiarly capitalist
nature of the political. This we have argued is the rechtasstaat
created by legal subjects as a passive reflex of the self-contained
economic base. Later I shall argue that this conceptualization of
the political is not only crucial for accurately grasping the nature
of the political, but also plays an important role in grasping
potential or actual contradictions between the economic, the
political and the ideological. It can scarcely be overemphasized
how much an accurate understanding of capitalism depends on
firstly an accurate theory of the economic base and secondly an
accurate understanding of the political and ideological and how
they relate to the base.

2 THE STAGE THEORY OF THE CAPITALIST


SUPERSTRUCTURE

Previously I argued that stage theory represents an extemaliza-


tion of the value/use-value contradiction in a concrete stage of
capitalist development where the motion of value must manage a
dominant type or types of use-value production. At the level of
stage theory the motion of value needs the active support of the
state and ideology, so that the superstructure is no longer
conceived as passive forms. At this level of analysis, the state and
Theory of the Capitalist Superstructure 159

ideology take on material institutional content and may play an


active and interventionist role in supporting accumulation. The
term 'superstructure' is therefore no longer accurate. Instead, it is
necessary to look for types of ideology and types of state structure
and state policy that most typically support the dominant mode
of capital accumulation.
A purely capitalist society is conceived as a global society
without external relations, but this is a high level of abstraction
that can never exist in history. In history capitalism does not
descend like a great flood that equally engulfs the entire globe at
once. Rather it gains a foothold first in one region and then in
another, and when one region is compared to another, we find
that it grows very unevenly. At the level of stage theory, it is
necessary to consider the issue of territory. The legal state
discussed at the level of pure theory now becomes a territorial
state with definite boundaries separating the domestic economy
from the rest of the world. The territorial state exists as one state
amongst many - as one legal subject writ large amongst many.
The category legal subject requires not only that there be clear
boundaries separating my property from yours but also that any
movement of property across boundaries only occurs through the
mutual consent of the respective property-owners. Since the
territorial state is internationally one legal subject amongst many,
it must also guarantee that legal subjects from foreign territories
do not use force to invade the property of its own legal subjects.
Since there is no international state to guarantee the status of the
state as legal subject, this status is from an international point of
view somewhat tenuous and is only based on mutual recognition.
For this reason there are strong pressures for the territorial state
to develop a standing army.
At the level of pure theory the state is nothing but a passive
background form securing the status of legal subjects. I have
pointed out that such a state is not based on any kind of
community since it is only the commodity that connects isolated
legal subjects. But from the point of view of the territorial state,
this is a severe defect since it needs to represent some kind of
unified force in dealing aggressively with other states. It is here
that the capitalist concept 'nation' comes into play and along with
it the ideology of nationalism. The ideology of nationalism unites
legal subjects into a nation. A nation is not based on any real
political community but is a way of uniting legal subjects within a
160 Political Economy

territory against the legal subjects of other territories. The nation


is not based on a political community that would enable the
people to control the state and organize their joint economic life,
rather it is an adjunct of the territorial rechtstaat which must
become a power in order to preserve itself. The nation may be
based on anything that a people living within a territory have in
common except positive political community because that would
destroy the legal subject and undermine capitalism. Nationalism
is basically a means of giving the commodity-traders in one
territory a separate identity as against the commodity-traders in
another territory. Ultimately it is a way of mobilizing legal
subjects in one territory to fight against those of another territory.
Since the nation is an adjunct of the territorial state the concept
'nation-state' is very appropriate.
Stage theory brings out the extreme importance of the nation-
state and the ideology of nationalism to capitalism. Nationalism
converts a passive shell of a state into a real power. A market-
governed society is an atomized society, and a state based only on
legal subjects can have no real power. Though the market orders
society, it does not create community and indeed tends to dissolve
traditional communities. Nationalism is a way of building a
common identity in a market society without undermining the
atomization required by the market. It creates a common identity
that can be mobilized as a force, but it does not create real
political community. Nationalism therefore picks up on any trait
that the people in a territory have in common that differentiates
them from the people in another territory, be it language, race,
religion or culture. Nationalism then uses the couplet domestic/
alien to set the people of one territory against those of another.
At the level of stage theory, the rechtsstaat of pure theory is
converted into a class state. Now the dominant ideologies and
state policies clearly serve the interests of the dominant type of
capital accumulation. But in order to maintain its fundamental
legitimacy as a rechtsstaat, the capitalist state must not appear to
be primarily a class state. Nationalism again plays a crucial role in
mobilizing the populace behind the state, while it essentially
carries out class policies. In this case, nationalism attempts to
assert the primacy of the nation over whatever forms of dawning
class-consciousness may be developing. In the stage of mercantil-
ism the state basically serves the interests of merchant-capital, in
the stage of liberalism industrial-capital and in the stage of
Theory of the Capitalist Superstructure 161

imperialism finance-capital. At the same time its legitimacy


depends upon its appearing to serve the 'national interest'.
Nationalism may of course at times become a popular and
progressive anti-capitalist ideology, but here I am only interested
in analysing the character of nationalism as a capitalist ideology. I
have stressed the extreme importance of this ideology as a support
for the capitalist state and as an ideology that suppresses class
identifications. In short nationalism is central to capitalist
ideology.
At the level of stage theory we see the basic rechtsstaat form
embodied in dominant historical types. The rechtsstaat now takes
the form of the nation-state which monopolizes the legitimate use
of force within its territory for the sake of protecting life and
property. The dominant type or organizational structure and
policy of this state varies from stage to stage. Closely connected
with the dominant type of nation-state is the dominant type of
ideology since ideology always plays an important role in
legitimizing the state, which with capitalism must take a legal
form. We see again at this level that the state is in a basic sense
both an ideological and political institution.
Capitalism develops in the first instance within nation-states
and only secondarily internationally. In its infancy capitalism
needs to be fostered and protected by a strong state, so that it
develops first where the nation-state is most developed. Where
there is no nation-state, the developent of an integrated 'home'
market creates one, as in the cases of Italy and Germany. I want
to tum next to examine the most typical state and ideological
institutions of the stages of mercantilism, liberalism and imperial-
ism.
During the stage of mercantilism where the dominant form of
capital accumulation is the putting-out system, the motion of
value has not yet completely subsumed the production process.
Being internally weak, capitalism is heavily reliant on external
relations and thus on a strong state. During this stage we see
absolute monarchy begin to be transformed into constitutional
monarchy which is a move in the direction of the state form as
abstract legal subject. The dominant form of the state in this stage
is the absolute/constitutional monarchy, and the dominant type
of state policies are those generally referred to as mercantilist and
most typically represented by chartered trading companies and
the Navigation Acts and Com Laws in England. So in concretiz-
162 Political Economy

ing our theory of the state we locate the dominant form of capital
accumulation for the stage, in this case British wool production
organized as a putting-out system by merchant-capital, and we
then study the state and ideological forms and state policies
required to support this type of accumulation.
The stage of mercantilism is still a stage of primitive accumula-
tion in which capital has only partially subsumed the labour and
production process as typified by the putting-out system. Thus
profits are not so much based on surplus value as on unequal
exchange maintained by monopoly and extra-economic force.
The state supports enclosures because it supports the putting-out
system of wool production and thereby unwittingly lays the
foundation for the next stage which rests on the commodification
of labour-power. State policy is necessarily very protective of the
emerging home market and infant industry. State policy is also
aggressive and war-like in plundering the rest of the world and in
supporting slavery and other forms of forced labour in foreign
lands where there is no significant labour-market. At home the
state resorts to various forms of forced labour to support infant
industry and the merchant marine through such institutions as
workhouses and impressment.
In the stage of mercantilism we not only see the territorial state
emerge as a sovereign legal subject serving to protect and nurture
infant capitalism, but also we see the creation of the nation as the
ideological complement of the territorial state. Thus the ideology
of 'possessive individualism' which flows from the sovereignty of
the legal subject needs to be complemented by nationalism that
can wield legal subjects together into an effective fighting force.
The more aggressive the state wishes to be, the more it must foster
nationalism. Though nationalism is important in all stages of
capitalism, it is most important in the stages of infancy and
decline when capitalism needs the support of a strong state. In the
mature stage ofliberalism, nationalism does not wither away, but
it is somewhat tempered by free-trade policies. It would be
incorrect to see a strong internationalist thrust attached to free-
trade; the capitalist state can never afford to be truly internation-
alist given the importance of nationalism to its legitimation and
strength.
In a historical sense the state, of course, is not a capitalist
institution. In looking at the historical development of the
capitalist state we are looking at the gradual 'domestication' of an
Theory of the Capitalist Superstructure 163

alien institution. In the stage of mercantilism the feudal absolutist


state is transformed gradually or by fits and starts into a state
which is conducive to the development of merchant-capital.
Trade wars require a strong state with a strong currency, and
economic growth in this period rests mainly on trade. It is
necessary to create a standing army and navy independent of the
feudal aristocracy to carry out successfully such mercantilist
policies, and this depends upon a system of orderly taxation and
the development of a domestic market. This development of the
state as a centralized administrative and repressive apparatus
requires a process of gradually breaking with dependency on the
feudal aristocracy - a process the aristocracy naturally resisted.
But already in the mercantilist stage in Britain we see the
emergence of more legal forms of domination, and indeed the
most important political theory written in this period advocates
legal domination and constitutional as opposed to absolute
monarchy.
With the development of industrial capitalism and the stage of
liberalism, we see the state increasingly adopt laissez-faire and
free-trade policies. This stage reached its purest expression in
Britain in the 1860s with the general abandonment of protection-
ism in favour of free-trade. The movement away from protection-
ism meant revoking the Corn Laws, which symbolized the fact
that the divorce of the direct producer from the land was
sufficiently complete that the commodification of land and of
labour-power could be maintained without the extreme protec-
tionism and state support that was needed in the previous stage
when the commodification of land and labour-power was still in
its infancy. The Factory Acts became necessary in order to secure
the reproduction oflabour-power and quell the growing rebellion
of workers. They represented the recognition that the continued
securing of the commodity labour-power requires some protec-
tion of the human substance.
The stage in which liberal ideology and liberal policy becomes
most dominant is one where the mode of accumulation of capital
is typified by cotton manufacturing in Britain or in other words
by the light manufacturing of consumer goods where competition
is fostered by the ease of entry into an industry. It is in this stage
that the idea of legal subject becomes most manifest in the
dominant form of government which is 'representative de-
mocracy' (in practice not very representative or democratic).24
164 Political Economy

Just as the liberal stage is closest to pure capitalism so is the ideal


of representative democracy closest to the state as sovereign legal
subject. In theory, representative democracy does not require any
sort of political community since it can be created entirely by
isolated legal subjects who cast their ballots just as they spend
their money in commodity exchange. In this case the imperson-
ality of the market is transferred to the government which
presumably reflects the interests of legal subjects as expressed by
voting. Also representative government combined with checks
and balances assures a relatively weak government and a truly
impersonal rule of law.
The development of heavy industry results in the stage of
imperialism in which the dominant form of capital accumulation
is finance-capital. Finance-capital requires a strong state with
protective policies both at home and abroad. Protective tariffs
give cartels a home base safe from foreign competition. But the
state is also needed to protect finance-capital in its aggressive
expansionism so that the resulting national chauvinism and
militarism culminate in an array of policies that we may label
'imperialist'. The development of heavy industry and monopoly
also fosters the rapid socialization of the labour process with very
large numbers of workers being controlled by one corporation or
one cartel, and this in tum fuels the class struggle which
concretely takes the form of a trade union movement and a
socialist movement. Capitalism is now sufficiently developed that
it can through taxation support a growing state apparatus with a
growing standing army and an embryonic welfare state. These
institutions are needed to buy off, or failing that, threaten the
growing workers' movement. An enlarged standing army is also
needed to back up the aggressive expansionism abroad. Finance-
capital requires increased state intervention both to support its
mechanisms of accumulation and to maintain the commodifica-
tion of a working-class which is becoming more powerful and
more political.
As Weber argues, the legal-rational authority of the capitalist
state tends to foster bureaucratic forms of social organization.
This is also fostered by military developments, especially the
Napoleonic army. But far and away the most important source of
bureaucratic organization is the capitalist enterprise based on the
commodification of labour-power. No historic event so fostered
the spread of bureaucratic forms in society as the merger
Theory of the Capitalist Superstructure 165

movement of the late nineteenth century. The development of


giant monopolistic corporations provided a model that govern-
ment was soon to imitate as the needs of finance-capital required
a large, powerful and interventionist state. The state began to
imitate scientific management's creation of artificial hierarchies
which served to control and undermine the growing worker
solidarity and militancy.
Since Germany represents the purest expression of finance-
capital, I tum to Germany in arriving at the most typical political
and ideological institutions of the stage of imperialism. Just as
monopoly and political intervention begin to undermine the law
of value in this stage, so the development of a bureaucratic state
as opposed to representative democracy begins to undermine the
rule oflaw. In so far as the interventions ofthe state begin to move
economic resources around, the universal and impersonal charac-
ter of the law, which accords so well with the impersonal rule of
the market, begins to break down in favour of particularistic
bureaucratic decrees. Therefore, although the bureaucratic state
is still in basic form a rechtsstaat and the type oflegitimacy is still
legal-rational, the rule oflaw per se is to some extent undermined
by the rule of bureaucratic expertise.
The economic policies of imperialism include: protectionism
and dumping, support for the export of capital, the creation of
colonies and spheres of economic influence, and the pacification
of the working-class and socialist movements. These policies are
supported by ideologies which are: national chauvinist, racist,
militarist, anti-democratic and anti-socialist. In this stage both
the working-class and the capitalist class become more complex
and stratified.
A great deal of work needs to be done to develop our
understanding of the capitalist superstructure at the level of stage
theory. It is at this level that the relation between territory, nation
and class needs to be explored. At this level the capitalist state is
no longer simply a legal form, but begins to emerge as a class state
with a repressive apparatus encased in a legal form. To a certain
extent politics and law become differentiated and each one
becomes internally complex as it is embodied in material
institutions. At this level the legal form of capital itself must be
studied whether the dominant form is the chartered trading
company, the industrial entrepreneur or the limited-liability
joint-stock company.
166 Political Economy

At the level of stage theory I have adopted the approach of


conceptualizing the dominant political and ideological forms as
required by the dominant form of capital accumulation in the
nation-state where this dominant form is located. Thus I look to
Britain to find the material-types of policies and ideologies that
are most conducive to the operaton of merchant-capital; I look to
Britain again for the types of policies and ideologies that accord
with the material-type of industrial-capital; and I look to
Germany for the dominant material-types that accord with
finance-capital. At the level of pure theory I derive the cell-forms
of the superstructure, at the level of stage theory the superstruc-
tural forms begin to take on a material content as they take on a
historical and geographical specific location, but they still only
represent dominant abstract-types. To a very large extent the
concrete material content to the theory of the capitalist state and
ideology must be developed at the level of historical analysis. It is
to this level that I tum next.

3 HISTORICAL ANALYSIS AND THE CAPITALIST


SUPERSTRUCTURE

Both pure theory and stage theory are useful in guiding the
historical analysis of the capitalist state and ideology. At the level
of pure theory, besides deriving the basic ideological and political
forms, we can begin to consider likely functions of the state at
more concrete levels of analysis, where it must become more
active. By looking at those points of the dialectic where the value-
form has most difficulty in subsuming use-values, it is possible to
see where, as a result, the domination of the commodity-form is
going to need the most support as we move away from total
reification. Where state intervention and regulation is most likely
to occur is in connection with the 'fictitious' commodities, money,
labour-power and land. 25 Though these three commodities come
to be regulated by the commodity-economic principle, they are
not the direct product of a capitalist production process. In this
sense they are fictitious commodities - not products of a labour
process but in capitalism subsumed to the commodity-form.
Money as gold is of course a real commodity. But even in the
dialectic of capital the minting of coins and issuing of paper
money requires some sort of institutionalized agreement among
Theory of the Capitalist Superstructure 167

traders; and though this is not necessarily a state, it is a step in the


direction of a public institution that acts to manage the affairs of
the capitalist class that it cannot manage privately. When we
analyse the territorial state at the level of stage theory, it becomes
even more evident that the state must playa role in regulating the
relation between internal money and external money. In order to
help maintain a stable domestic currency, the state establishes a
central bank. The state may also try to maintain a positive
balance of payments. Further, the state may supplement the
development of commodity-money and credit-money by issuing
inconvertible paper money or what is essentially state-made fiat-
money. This, of course, always runs the danger of creating
inflation. In recent years, a favourite way of the state to regulate
the economy has been through manipulation of the money
supply. This manipulation becomes all the more possible and
necessary once money has become disconnected from its com-
modity-form as gold. In recent years, the partial decommodifica-
tion of money has created an international monetary system of
freely fluctuating currencies, which means that state economic
policy must ensure a strong currency in order to maintain any
status in the international economic order.
Land as a fictitious commodity invites state regulation because
initially the land-owning class is separate from the capitalist class.
Agriculture and food production, as has already been pointed
out, does not easily lend itself to capitalist production and to
industrialization, and yet food is a basic need in any community.
Also the continued separation of the working-class from the land
is crucial to maintaining the commodification of labour-power.
Finally land is the basis of all production and is in some ways a
non-renewable resource that can be polluted, turned into waste-
land or converted from agricultural uses to other uses.
In connection with land we may also mention fixed capital.
Sekine points out that fixed capital has two aspects: it is a
reproducible means of production and it is a temporarily
irreproducible means of production comparable to land. 26 This
land-like aspect of fixed capital is the material basis for the
alternation between the de~pening and widening phases of capital
accumulation that we discussed earlier. In other words it is the
material basis for periodic crisis along with the commodity
labour-power. In so far as large-scale technical innovation or
fixed capital investments are tied in with periodic crisis, this is an
168 Political Economy

area that is bound to call forth state economic policy. This is


because crises bring out the fundamental contradiction of
capitalism between value and use-value and underscore its
mortality, so that state policies are often called for to help
alleviate the severe social dislocations that accompany periodic
crises.
The most problematic fictitious commodity for capital and the
one that therefore invites the greatest amount of state interven-
tion is of course the commodity labour-power. This is so for the
obvious reason that human beings resist being treated as things
and therefore organize to resist the exploitation and oppression
that exists in capitalist society. Furthemore, the mere continua-
tion of the commodification oflabour-power in a purely capitalist
society requires periodic crisis, and each crisis exposes capitalism
itself to dangerous disruption. It is especially in a crisis situation
that the state is likely to expand its regulation of the economy and
particularly the reproduction of labour-power as a commodity;
for any substantial decommodification of labour-power must
spell the end of capitalism.
Though in a purely capitalist society, capital simply leaves the
reproduction of labour-power up to the worker's instinct of self-
preservation, at the level of concrete history this proves to be
disastrous, so that the state is forced to step in with policies that
guarantee the continued reproduction of labour-power in a
commodity-form suitable for needs of capital. Thus it is the
continued commodification oflabour-power that is most difficult
for capital to achieve and that therefore calls for state policy that
intervenes and that regulates the reproduction of this most crucial
and vital of all commodities.
Class struggle emerges primarily around this issue of the
commodification oflabour-power. When we move away from the
total reification of pure capitalism, capital requires the support of
the state to maintain this commodification while the working-
class resists and attempts to protect itself from the insecurities and
ravages of being reduced to a mere commodity in the capitalist
market. In particular the working-class must be concerned with
improving working conditions, job security, and level and
security of income. In moving away from the total reification of
pure capitalism, the objective positions of capital and labour in
the inner organization of capital give rise to class struggle and to
state intervention to keep it within bounds.
Theory of the Capitalist Superstructure 169

These considerations of the fictitious commodities, money,


land and labour-power can serve to guide our analysis of the state
at the level of historical analysis where we need guidance through
particularity and contingency. We would expect, then, to see state
regulation of the economy develop most strongly in these areas of
the economy where the commodity-form must secure more or less
alien use-values, and where, therefore, in a less than totally reified
society, we would expect difficulties to occur.
Stage theory offers a framework for theorizing the actual
history of particular states and ideologies as well as state and
ideological systems. Thus, for example, British mercantilism is
the material-type for the stage of mercantilism, but specific
mercantilist policies in their detailed development and evolution
must be studied at a historical level. Further, the mercantilist
policies of France or Spain or Holland were not necessarily the
same as the British. We need to see also how mercantilist policies
affected the periphery and semi-periphery of capitalism. Finally
we need to analyse the type of international political system
spawned by the dominant type of capital accumulation, whether
it is hegemoney by a single state, or an international system where
hegemony is established by two or more states in some sort of
balance or stalemate, or an international system involving a real
international state as in the world-state. This last possibility is,
however, unrealistic because capitalism is so rooted in the nation-
state historically, that world government would only be a realistic
possibility in a transition phase away from capitalism.
The historical analysis of the superstructure of a particular
nation-state involves an analysis of the history of the nation-
state's involvement with the international dimension of capital-
ism. At this level we look concretely at how the political and
ideological institutions promote or maintain the commodifica-
tion of the fictitious commodities, labour-power, land and
money. Struggles may develop around any or all of these
commodities and the state policies regulating them, but the most
important are the class struggles that develop around the
commodification of labour-power. These struggles may become
particularly intense during periodic crisis when capitalist produc-
tion is temporarily disrupted by the need to replenish the
industrial reserve army and revolutionize fixed capital.
The dominant state and ideology always try to appear to serve
the interests of the abstract citizen and this appearance is
170 Political Economy

confirmed in their basic legal form. But in fact that state generally
serves the interest of the dominant fraction of capital if there is
one. The capitalist class is not usually homogeneous or very clear
about its best short-term or long-term interests, so we cannot say
without qualification that the state always serves the interests of
the capitalist class. Instead we may say that the state cannot go
against the fundamental interests of capital except in a phase of
transition or extreme crisis. In other times there is a groping
relationship, with the capitalist class trying to gain clarity about
its interests, and the state trying to find policies that best serve
these seldom unambiguous class interests. Also because there is a
tension between the legal form of the state and its class content,
the state may at specific junctures not respond to the interests of
the dominant fraction of capital. In situations of extreme crisis
the capitalist state may temporarily lose its constitutional form
and become dictatorial but this is always by way of exception. (I
agree with Poulantzas's classifying these states as 'exceptional
states'.)
Sometimes the capitalist state is forced to give in to the
demands of the working-class or socialist movements. But these
concessions cannot fundamentally undermine the accumulation
of capital or we are talking about a transition away from
capitalism. Whatever concessions are made are generally subver-
ted in the long run or are implemented in such a way that they
become another growth industry for capitalism. Real and lasting
gains will be made by the working-class only in a transition
towards socialism.
One of the unique features of this approach to the capitalist
superstructure is the emphasis placed on the fundamental non-
class character of the superstructure and therefore on the
importance for the legitimacy of the capitalist state that it appears
to be neutral, disinterested and above class. Gramsci is one of the
few Marxist theorists to begin to realize the power of the capitalist
superstructure to mobilize support by appearing to further the
best interests of the majority, if not of all. This hegemony is not
simply a power to manipulate and control culture, but is
embedded deeply in the very basic superstructural forms which
always address individuals as legal subjects, abstract citizens and
property-owners. It is this basic way of 'interpellating' subjects
that makes the ideology of the nation so strong as a unifying
alternative to class interpellations. Understanding all of this is
Theory of the Capitalist Superstructure 171

extremely important strategically in order for the socialist


movement successfuly to organize a counter-hegemonic force. In
this I agree most strongly with Lac1au and Mouffe who point out
the sectarian damage that has been done historically by class
reductionist approaches to political and ideological struggle. This
becomes especially important in the present transitional period,
where in advanced industrial countries the industrial proletariat
is a minority of the population and in some cases much better off
than many other working people. The socialist movement must
be seen to represent the interests of humanity as a whole in a most
forceful way in opposition to the narrow sectarian interests of the
capitalist class and the capitalist superstructure. Socialists must
hold up the possibility of real community and real democracy in a
de-reified society as a realistic possibility in opposition to the
pseudocommunity held together by the market and
pseudodemocracy which is based on the abstract legal subject
instead of any substantial equality. In fighting to overcome the
divide-and-rule nature of capitalism, socialists must understand
how much the basic superstructural reflexes are also the reflexes
of each subjectivity and we must learn to communicate with
people so that their subjectivity can be 'interpellated' to the
socialist movement. We must take notions like 'individual',
'freedom' and 'democracy' and then tum them against capitalist
hegemony.
The capitalist superstructure becomes less of a superstructure
and more interventionist as we move away from a purely
capitalist society whether it is to more concrete levels of analysis
or back in history towards pre-capitalism or forwards towards
post-capitalism. In the world-historic transitional phase away
from capitalism the law of value can less and less manage the
more complex and social use-values that are produced, and the
remaining commodified sector increasingly depends on a decom-
modified state and service sector. As more and more of economic
life escapes effective market regulation, the state steps in to
regulate economic life. But if the legitimacy of the capitalist state
depends largely on its seeming disinterestedness, then in-
volvement in the economy is bound to undermine its legitimacy.
The state is caught in a double bind for it must increasingly
manage the economy, but in doing so, it undermines its own
legitimacy. At the very time that the state must expand spending
to bolster its fading legitimacy, it is also faced with a fiscal crisis.
172 Political Economy

In this situation the need for a socialist state based on real


community and democracy becomes a necessity. Such a state
could produce policies which really represent the general interest
rather than representing the dominant class or fraction while
hiding behind a legal-rational facade. Therefore the legitimacy of
such a state would be grounded in an egalitarian community and
not in a split-off formal legality. Private life would no longer be
grounded in an objectified economic order in contraposition to a
subjectified and formalized public order. In a socialist society
economic life would be de-reified and as a result would become
public so the equating of the economic with the private (as in
'private enterprise') and the political with the public would come
to an end. With the end of the reification the divorce between
object and subject which gives rise to the basic character of the
capitalist superstructure would come to an end. The state would
no longer be a split off formal object based on the legal subject or
abstract citizen but would be based on real citizens as they
participate in the democratic organization of all social institu-
tions from the workplace to the neighbourhood to governmental
institutions. The passive legal subject of the purely capitalist
society would be replaced by the politically involved and
informed member of a political community. The contradictions
of decaying capitalism make advanced industrial countries less
and less governable by the old capitalist state forms. The decline
of legitimacy will lead to more and more authoritarian political
forms and reliance on force. The only realistic option to this drift
is a thorough democratization of the economy and society or in
other words socialism.

4 CONCLUSION

The dialectic of capital combined with a levels of analysis


approach produces a theory of the capitalist state and ideology
which clearly and precisely sets forth the relation between the
economic, the political and the ideological at the level of pure
capitalism. My theory of the capitalist superstructure is grounded
at the level of pure theory because it is at this level that the
meaning of 'capitalist' is objectively grounded. At this level of
analysis I explore the cell-forms of the superstructure while
holding its substantive content implicit. At the level of stage
Theory of the Capitalist Superstructure 173

theory I begin to develop the substantive content of the capitalist


superstructure as material-types of institutions and policies
dominant in different stages of capitalist development. At the
level of historical analysis, pure theory and stage theory can serve
to aid in studying the relations between the economic, the
political and the ideological in concrete historical environments.
In the transitional phase away from capitalism state intervention
reaches such proportions that it is difficult to distinguish the
economic and the political since the economic becomes
politicized and the political becomes economicized. To some
extent the distinction between the economic and the political can
still be made analytically using as a reference-point pure capital-
ism and stage theory where the economic and political are more
clear and distinct.
Part II
Dialectical Materialism
7 The Uno jSekine
Approach to Dialectical
Materialism
Part I dealt with Marxian political economy or the theory of
capitalist society. In Part I I showed the sense in which the theory
of a purely capitalist society serves as the foundation for Marxian
political economy as a whole. It was necessary that this discussion
of substantive content precede a more extended discussion of
ontology, epistemology or methodology, because such philoso-
phical discussions tend to be formal and empty unless they are
based on a theory or an approach that achieves substantive
knowledge. In Part II I shall briefly explore the implications for
dialectical materialism of the fact that Uno and Sekine have
brought to light the dialectical logic embedded in the theory of
capital. I shall argue that the best way to clarify 'dialectical
materialism' is not to start with some sort of general philosophy
of materialism or general philosophy of dialectics, but rather to
derive our understanding of dialectical materialism from the one
completely worked out and rigorous dialectical theory, namely
the dialectic of capital. Our understanding of dialectical material-
ism should be based on reconstructing the logic embedded in the
theory of a purely capitalist society, and on drawing out the
implications of such a logic. Without a reference-point in
substantive knowledge 'dialectic materialism' becomes another
philosophical concept set adrift without rudder, keel or anchor to
be blown by every philosophical wind.
The history of debate over dialectical materialism and over the
usages of the concepts 'dialectical' and 'materialism' has
produced little agreement, or even a common point of reference.
Sometimes 'dialectics' is used as a term meaning roughly
'interaction' as in 'dialectic between base and superstructure' or
'dialectic between theory and practice'. A somewhat less loose
177
178 Dialectical Materialism

usage is to think of dialectical materialism as a set of maxims for


good thinking such as: 'think about things in their interaction, in
their motion, and in their relation to the whole'. An even more
definite approach is to base dialectical materialism on Engels's
three 'laws': quantity into quality, negation of the negation and
interpenetration of opposites. The problem with all these approa-
ches is that they do not derive their understanding of dialectical
materialism from a theory which achieves substantive knowledge
and is at the same time both dialectical and materialist. To say
that there is a dialectic of nature or a dialectic of history is merely
a hypothesis until someone actually produces a complete dialec-
tical theory of nature or of history. But a dialectical theory of
capital exists, and therefore one clear exemplar of dialectical
materialism. This paradigm case clarifies our understanding of
what dialectical materialism is and therefore what it would take
for there to be a dialectical theory of nature or history.
In his manuscript The Dialectic Capital Sekine has not only
developed a logically rigorous dialectical theory of pure capital-
ism, but also has shown that there is a close parallel between this
dialectic and Hegel's Logic. Those who have not read Sekine's
work will probably not be convinced by this chapter that the
dialectic of a purely capitalist society is rigorous in the sense that
it has a necessary beginning, unfolding and closure, and that this
logic is parallel to that in Hegel's Logic. In this book I expand on
these points a little, but there is no substitute for actually reading
Sekine's The Dialectic of Capital as a whole. The existence of such
a work is a momentous event for the debate over dialecticial
materialism because it provides a much firmer foundation than
heretofore upon which to build a common understanding.

1 HEGEL'S DIALECTIC

There has been considerable debate in recent years over the


relation between Hegel and Marx: does Marx invert Hegel,
extract the rational kernel or break with him entirely? Clearly
Hegel had a very large impact on Marx, particularly in Hegel's
claim that dialectics was a method of achieving objective
knowedge. Marx's Capital has a dialectical logic embedded in it,
although it is not made explicit by Marx. Uno's refinement of
Marx's law of value brings out its dialectical structure, and
The Uno/ Sekine Approach 179

although Uno was familiar with Hegel's Logic he did not make
explicit the close structural parallel between Marx's law of value
and Hegel's 'law of "Being" '. It is only with Sekine's Dialectic of
Capital that the dialectical logic of the law of value is made fully
explicit, and the parallels between it and Hegel's Logic are drawn.
The logic is basically the same in both cases, only the ontology
and theoretical object differ. For Hegel the dialectic involves the
unfolding of the Absolute Idea in the Universe, and for Marxian
political economy the dialectic involves the unfolding of capital in
the capitalist mode of production (or in a purely capitalist
society). According to Sekine, Hegel developed the logical form
of the dialectic despite an idealist ontology that prevented the
dialectic from serving as a basis for social science.
Later I shall argue that there are in fact some important
differences in the dialectical logic of Hegel and Marx stemming
from their different ontologies, but these differences occur within
an overall parallel. In fact one would expect that the radical
difference in their ontology would be reflected in a radical
difference in their logics. That this is not the case stems mainly
from the fact that the reification of capitalism purifies economic
categories much as philosophical universalization purifies meta-
physical categories. The general close parallel in dialectical logic
between the two makes it desirable to start with Hegel, then to
develop the dialectic of capital and finally to explain dialectical
materialism by contrasting the dialectic of capital with Hegel's
dialectic of the Absolute Idea.
Hegel believed that concepts arising from sensation present the
world of outward appearance and not the inner reality of things,
because imagistic concepts are permeated with contingency and
partiCUlarity. Being based on sensation, most everyday discourse
clings to appearances and is therefore not suitable for achieving
knowledge. In contrast, according to Hegel the history of
philosophy generates abstract universals. Though at first relative-
ly empty or one-sided, these philosophic concepts become
purified of contingency and taken together become ever more
adequate to grasping the inner structure of reality. This inner
structure is rational necessity in the sense that the philosophical
universals hang together in a totality in which the inner connec-
tions are necessary connections freed from contingency through
the universalization of reason. But this means that the inner
reality of the universe is rational necessity which governs the
180 Dialectical Materialism

universe in the sense that reason is self-synthesizing (it necessarily


unfolds into this and only this totality).
Hegel's philosophic system consists of three levels: The Logic
which traces the necessary inner connections of pure reason, the
philosophy of spirit which traces the unfolding of reason in the
human spirit and the philosophy of nature which shows that even
the material universe is ultimately a manifestation of Reason. To
understand Hegel's dialectic, the primary focus should be on its
purest and most logically rigorous manifestation in The Logic.
Hegel's Logic brings out the nature of an object capable of
being theorized dialectically. It is divided into three main parts or
moments of reason: the Doctrine of Being, the Doctrine of
Essence and the Doctrine of the Notion. Each of these doctrines
brings out an aspect of the dialectic. The Doctrine of Being brings
to the fore the self-containedness of the dialectic, the Doctrine of
Essence emphasizes that the dialectic is self-determined and the
Doctrine of the Notion brings out that the dialectic is self-
revealing. An object capable of being theorized dialectically must
therefore be self-contained, self-determined and self-revealing.
Let me expand on each of these dimensions of dialectics.
The Doctrine of Being starts with the most abstract and empty
and universal category of 'Being'. But because 'Being' is both
universal and empty it threatens to collapse into 'Nothing', but
that would be absurd. The movement between 'Being' and
'Nothing' that does not collapse into one side or the other is
'Becoming'. In this way the Doctrine of Being proceeds to show
that a category that initially is considered in its discrete im-
mediacy cannot stand on its own, and indeed implies other
categories that also cannot stand on their own. Taken together
the categories of the Doctrine of Being necessarily imply one
another and therefore hang together in a self-contained totality.
Where the Doctrine of Being looks at categories in their
immediacy and traces necessary connections through a logic of
transition that moves from one seeming discrete category (e.g.
Being) to another (e.g. Nothing) and to a third (e.g. Becoming),
the Doctrine of Essence analyses the underlying substance of this
self-contained totality to show how it is self-determined or
grounded within itself. Here the concepts are paired concepts
such as 'positive' and 'negative' or 'ground' and 'appearance' -
concepts that imply one another or mediate one another. The
concepts of the Doctrine of Essence are mediated pairs as
The Uno/Sekine Approach 181

opposed to the immediate discrete categories in the Doctrine of


Being. In the Doctrine of Essence, the logic of reflection develops
the necessary connections, so that, for example, the reflection of
'ground' into 'appearance' and vice versa gives rise to 'actuality',
which represents the dialectical resolution of the opposition
between 'ground' and 'appearance'. The Doctrine of Essence
demonstrates that the appearance of self-containedness in the
Doctrine of Being is real and substantial because it is a self-
containedness that is also self-determined.
When the self-containedness is filled out and fully developed by
the self-determination that it enfolds, then there must be outward
manifestations that reveal the truth of this fully developed
totality. Here Hegel uses a logic of development to show that the
self-containedness and self-determination of the previous two
doctrines can be maintained, while explaining the development of
outward manifestations which give us a 'handle', so to speak, on
the truth of the previous two doctrines. In this fashion the
Doctrine of the Notion uses a logic of development to bring out
the fact that the dialectic is self-revealing.
A dialectic is only self-revealing to the extent that it is fully
developed and this is why Hegel used the well-known metaphors:
'the owl of Minerva only takes flight at dusk', and the necessity
for the world to become 'grey' to emphasize this point. It is only
because philosophy had become fully developed and mature and
because the world had reached the age of reason that Hegel
believed he could immerse himself in the subject-matter and find
the necessary inner connections by letting the logic of the subject-
matter move his own mind. This in fact is the basis to his claim of
objective knowledge. Instead of imposing his own subjective
schema on the subject-matter, he claims to let the subject-matter
speak for itself thus revealing its objective inner logic. Because the
connections between the categories are necessary connections
free from contingency, it is not he himself who makes the
deductions, but rather he discovers 'the method by which the
categories deduce themselves'.' This may sound mystifying, but is
it really so strange to become so immersed in something that one
can come to see the logic or form embedded in that something? Is
this so different from a sculptor who claims that the form was in
the wood or in the soapstone, and he or she simply helped it to
emerge? No doubt there is room for endless debate on fine points,
but the basic distinction that Hegel is trying to make is clear: does
182 Dialectical Materialism

the investigator impose a logic on the subject-matter or does he or


she discover a logic embedded in the subject-matter? Hegel claims
to have done the latter, and this is why he thinks that his theory is
objective.
Hegel's totality is all of creation, and the inner logic is the
necessary structure of rational thought itself, the Absolute Idea,
or God. Hegel believed that the universe is permeated by reason
and by purpose, so that ultimately all of existence is grounded in
rational necessity. The immediate appearances of the senses often
seem to manifest nothing but accident and contingency. But the
movement of the philosophic mind away from the imagistic
thinking of sense perception finally reaches the lofty heights of
pure abstraction where the necessary inner connections between
the philosophical universals are revealed. The universe is seen by
Hegel to be a coherent totality in which all things are interrelated
in a self-contained whole. It contains the principle of its own
existence and its own determination within itself, or, in other
words, is grounded within itself, and this inner principle is called
'Absolute Idea' or 'God'. Hegel believed that human history had
reached the age of reason. It was now possible for him to aid the
Absolute Idea in revealing its inner logic. He, therefore, viewed
his own philosophy as reflecting the rational system of the
universe, which, having reached full development, was revealing
itself. But how does dialectical reasoning reveal the inner logic of
reality?
Dialectical logic starts with the simplest, most abstract and
emptiest specification of the totality under consideration. The
very emptiness and abstractness of the beginning forces thought
to negate this emptiness and to fill it in with ever more concrete
specifications. Each step in the dialectic is a necessary step
impelled by negation and contradiction towards a more concrete
(more determined and more specified) synthesis which in tum
gives rise to new contradictions until the dialectical circle reaches
closure. At this point there are no more contradictions to impell
the logic forward, for we have returned to the starting-point, but
now with a concreteness which fills the original emptiness with
objective knowledge. Starting with the abstract, the dialectic
traces the necessary inner connections of the totality until the way
in which it determines itself is completely revealed. The dialectic
traces the necessary inner structure and dynamic of the totality
which makes the totality what it is, so that the necessity is relative
The Uno/Sekine Approach 183

to the self-positing identity of the totality. In a successful dialectic


all categories are grounded in necessity. Such and such a totality
must have this particular inner logic. No relations are contingent
in the sense that they might be otherwise. Thus, in the dialectic,
the sequence of categories is a necessary sequence with a
necessary beginning, unfolding and ending. No category can be
simply introduced or posited by the theorist; rather the motion
inherent in the subject-matter must show the necessity of each
derivation in the logic.
As I have already mentioned, Hegel's system involves three
basic dialectics: the dialectical logic, the dialectic of spirit and the
dialectic of nature. Though the dialectic of spirit and the dialectic
of nature are less pure, and therefore less rigorous, than the
dialectical logic, Hegel sees no problem in completely subsuming
them to the logic, since they simply represent the same logic only
unfolding in the realm of human consciousness and in the realm
of nature instead of in the realm of reason itself, i.e. philosophy.
Hegel' failure to see anything problematic in the relation of the
three dialectics severely weakens his philosophical system, since
he does not recognize the tension between the pure logic and the
more empirical and contingent concepts of the natural and
historical sicences. As a result, in these latter two sciences, the
dialectic acts more on analogy with The Logic than as a train of
reasoning arising from the subject-matter itself. In these cases the
dialectic is especially unconvincing and often appears as an alien
or contrived imposition, which, far from arising from the
specificity of the realm under consideration, rests upon the
metaphysical assumption that reason rules the universe. The
dialectic of nature, for example, does not reduce all of nature to a
single rigorous dialectic as a necessary unfolding of an initial
contradiction. There is no dialectic of nature in this sense. Instead
Hegel's dialectic of nature tries to show that the natural sciences
as existing in his day can be seen as emanations of dialectical
reason. In other words, the results of natural science do not
depend on the dialectic, but Hegel's idealism requires that he take
great pains to show that whatever these results are, they are
consistent with the Absolute and indeed represent one more case
of the cunning of reason working through men without their
knowledge.
Hegel is a major figure in the history of human thought because
of his contributions to the understanding of dialectics. Dialectics
184 Dialectical Materialism

opens the possibility of finding a more objective foundation for


knowledge by bridging the gap between subject and object, which
has always been the basic and seemingly insurmountable problem
of philosophy. Though Hegel successfully develops the basic
principles and forms of dialectical thought, his contributions to
substantive knowledge of human history and society are disap-
pointingly thin. This is because of his largely religious and
metaphysical ontology which entraps the dialectic within a
totality where its real scientific possibilities cannot be developed.
For Hegel dialectical thought entailed absolute idealism which
put the divine spirit working through reason at the centre of the
universe. By trying to explain everything from the point of view of
the Absolute Idea, he in fact explained little about concrete
history and social life. As a result his system is ultimately more
akin to a religion than to science.
Hegel wrote at a time when what he called 'civil society' and
what others have called 'market society' or 'capitalism' was still in
its infancy. The development of reason in this world, which Hegel
saw coming to fruition with the enlightenment and his own
philosophy, had a definite material base. As Max Weber and
others have shown, modem rationalism is largely a product of
market society and the development of reification. Reason was
appearing more in the world, but it was not the kind that Hegel's
theory called for. Hegel's reason was more akin to the organic
reason of medieval thought or even the reason of the unified
interrelated universe of oriental philosophy, than to the calculat-
ing reason of profit-oriented market man. Although the rule of
reason was in actuality the rule of capital or civil society,
capitalism was still sufficiently undeveloped that Hegel did not
see this and preferred to project 'old world philosophy' onto this
new rationality, and contain civil society between the family and
the state where it is firmly subsumed to divine reason and the
rational will. Hegel could not foresee that civil society would
come to play the role of his 'God' in shaping the destinies of
modem man, and that this same civil society would be the source
of an alienation so grounded in material and human institutions
that no mere philosophy could overcome it.
Hegel's ontology involves a double displacement. First, he
confuses the rule of capital in the world with the rule of reason.
This reas, easy to do since capital was still in its infancy and
the state not yet clearly dominant in human affairs. Second, he
The Uno/ Sekine Approach 185

sees the reason which arises from the commodification of human


life, not as the reason of calculating economic man, but as divine
reason which finally humanizes the universe. Hegel envisions a
world ruled by the reason of divine harmony on the threshold of a
world about to be ruled by capital where reason primarily takes
the form of the calculations of possessive individuals. He
envisions a world where alienation comes to an end on the
threshold of a world where alientation becomes deeply embedded
in the material structures of everyday life. In fact Hegel marks the
culmination of idealist philosophy which sees some combination
of divinities or abstract ideas as ruling the world. The seculariza-
tion and rationalization of the world in the nineteenth and
twentieth centuries makes it impossible for mainstream philoso-
phy to produce any longer the great metaphysical and speculative
systems of traditional philosophy. Hegel's philosophy is only
possible in a world where capitalism is developing but is not yet
too developed. It is basically a religious solution to the problem of
alienation, a type of solution which is only plausible in the early
stages of capitalism. It is the most ambitious edifice of old world
philosophy, and it is an appropriate final monument - more
grand and more all-encompassing than any previous philosophy.
According to Hegel, dialectical thought is necessarily idealist
and this is because the necessary inner connections of the universe
only become revealed with the purest concepts of philosophy. But
Hegel was wrong about this. In fact his dialectic was seriously
flawed precisely because of its idealist ontology. He grounds our
understanding of the universe in objective rational necessity, but
fails to produce a theory with any significant explanatory power
in relation to those concrete realities of greatest human concern -
history and society. The centrality of pure philosophical univer-
sals in Hegel's philosophy was a source of both strengths and
weaknesses. The strengths have to do with his success in
presenting the basic principles and forms of dialectics and in
constructing a dialectical logic. The weaknesses relate to the lack
of explanatory power of the dialectic and its divorce from
empirical reality. From the point of view of social science and
natural science, Hegel's dialectic appears to be an alien construc-
tion that, far from grounding the knowledge of history and nature
in rational necessity, seems to impose a metaphysical contrivance
upon social and natural science.
The basic problem with Hegel's dialectic is that his dialectical
186 Dialectical Materialism

totality, which is in the first instance the entire universe of human


experience, does not permit the dialectic to make the contribu-
tions to knowledge of which it is capable. Such a theoretical
object or object of knowledge forces the dialectic to be idealist
since only the most abstract philosophical ideas can really
encompass the universe. A materialist dialectic of the universe is
unlikely, since matter per se does not seem to have a necessary
inner logic out of which the entire universe including all of human
history can be shown to unfold. And yet, I shall argue later, a
materialist dialectic (but not of the universe) can help us ground
our knowledge of history and society on a firmer foundation,
which can bring together social science and dialectics in a way
that fulfils the original promise of dialectics - the promise to
provide an objective ground to our knowledge of society. The
explanatory power of the dialectic is severely hampered by
Hegel's totality. Supposedly all of nature and history can be
generated out of rational necessity. But as Hegel moves from The
Logic and the Absolute Idea towards the concreteness of history,
it is not clear how the lower levels of analysis where greater
contingency occurs relate to the higher levels - the move between
levels of necessity is not clearly specified. Further, even at the level
of the historical concrete, it is still the idea that prevails; the
concrete is never examined in itself and in its historical specificity
and concrete development. The materiality and complexity of
history is absorbed into the most abstract idea which periodizes
history into a series of 'zeitgeisten'. In his effort to ground
everything in rational necessity, Hegel does not give contingency
its due. Instead of immersing himself in the materiality of history
and finding a dialectic there, he imposes a 'made-in-heaven'
dialectic on history which cannot help but have very little
explanatory power. Hegel's dialectic is only at home with his
idealist ontology in a formalistic and one-sided way. The dialectic
can only realize its potential by forming an objective foundation
for social science, but this requires a materialist foundation.

2 THE DIALECTIC OF CAPITAL

Uno devoted the later part of his life to exploring the inner logic of
Marx's Capital with the aim of discovering the necessary inner
connections of the law of value. The logic that he arrived at by
The Uno/Sekine Approach 187

immersing himself in Marxian political economy was later seen,


by his student Sekine, to be close in structure to Hegel's Logic. Let
me examine the parallel that Sekine develops between the logic of
a purely capitalist society and Hegel's logic of absolute reason:

Dialectic of 'Capital' Hegel's 'Logic'

I. The Doctrine of Circulation I. The Doctrine of Being


A. The commodity-form A. Quality
B. The money-form B. Quantity
C. The capital-form C. Measure

II. The Doctrine of Production II. The Doctrine of Essence


A. The production-process of A. Ground
capital
B. The circulation-process of B. Appearance
capital
C. The reproduction-process C. Actuality
of capital

III. The Doctrine of Distribution III. The Doctrine of the Notion


A. The theory of profit A. The subjective notion
B. The theory of rent B. The objective notion
C. The theory of interest C. The idea.

The dialectic of capital starts with the Doctrine of Circulation


which examines the fundamental circulation-forms of capitalism
in their discrete immediateness. The commodity must be the
starting-point because it is the most abstract, universal and all-
encompassing concept of capitalism, or, in the words of Marx, it
is 'the cell-form' which contains the basic contradiction of the
dialectic of capital. Just as the basic contradiction of Hegel's
dialectic is between 'Being' and 'Nothing' so the fundamental
contradiction of the dialectic of capital is between 'value' and
'use-value'. An analysis of the commodity shows that it is a unity
of contradictory aspects: value representing its social homogen-
eity in relation to other commodities and use-value representing
its material heterogeneity. Using a logic of transition Sekine
shows that the commodity-form necessarily generates the money-
form and that the two together necessarily generate the capital-
form. Analysis of the commodity-form demonstrates that it
cannot stand on its own because the commodity-form cannot
universalize itself without the money-form which represents an
188 Dialectical Materialism

externalization of value. Analysis of the money-form shows that


it cannot firmly establish itself without the capital-form
M-C-M' which represents a synthesis of the commodity-form
and the money-form. Only in the circulation-form M-C-M' does
value free itself from use-value constraints so that its motion
becomes self-contained. It this way the Doctrine of Circulation
uses a logic of transition to establish the self-containedness of
capital as a circulation-form or value-form.
The Doctrine of Production uses a logic of reflection to show
that the circulation-forms can subsume an underlying labour and
production process in order to create a specifically capitalist
process of value formation and augmentation. Here the con-
tradiction between value and use-value takes the form of a
contradiction between historically specific value augmentation
and universal use-value production. 'In this case the contradic-
tion cannot be overcome by suppressing particular use-values in
order to release value, but by letting the form of value wholly
absorb or internalize the production of use-values itself.,2 The
Doctrine of Production demonstrates that the self-contained
circulation-form M-C-M' becomes self-determining once its
source of value expansion is internal to its own motion.
In the Doctrine of Distribution the contradiction between
value and use-value takes the form of a contradiction 'between
the unifying principle of the capitalist market and its necessarily
heterogeneous ingredients,.3 Here the logic of development is
used to reconcile the motion of value with the necessary diversity
of use-values in a purely capitalist society. In the Doctrine of
Production value formation and augmentation is constrained by
use-values without concern for the technologies associated with
particular types of use-values. 4 In the Doctrine of Distribution
the unity of circulation and production established in the
previous two doctrines maintains itself while capital differentiates
itselfinto heterogeneous forms required by the market. Thus, for
example, capital is differentiated into branches of industry with
distinct organic compositions, and into commercial and interest-
bearing capital, while at the same time this differentiation is
unified through the average rate of profit.
In the Doctrine of Distribution the economic forms which lie
on the surface, namely profit, rent and interest, constitute a 'holy
trinity' which completely mislead our understanding without the
previous doctrines which bring out the necessary inner connec-
The Uno/Sekine Approach 189

tions of capitalism. For example, 'since the rate of profit is a


mercantile form indifferent to the productive base of society, it
automatically effaces the trace of any specific mode of production
and establishes the universal relation of equality among the
traders of the market'. 5 Rent makes it appear that a thing, land,
produces value; and interest is the most fetishized form of all since
it makes capital appear to create value automatically by itself. But
the Doctrine of Distribution demonstrates that these outward
fetishized forms are simply the outward manifestation of a self-
contained and self-determined inner logic. Therefore the Doc-
trine of Distribution shows that capital is self-revealing, not in the
sense that it tends to become transparent, but in the sense that in
fully developed capitalism it is possible to make the connections
between its outward manifestations and its inner logic.
Although the basic contradiction of the dialectic of capital is
between value and use-value, this contradiction takes different
forms in the distinct logics of the three doctrines. Our starting
assumption is a fully developed and fully purified capitalism.
Given a purely capitalist society, how does it work? The fact that
it is possible to construct a rigorous dialectic of such a society
proves that it has a necessary inner logic. The three doctrines look
at the same thing - a purely capitalist society - from three
different points of view with distinct logics. At the same time these
three logics are unified in a dialectical totality.
The Doctrine of Circulation looks at commodities, money and
capital as they first appear on the surface of pure capitalism - i.e.
as discrete entities. It demonstrates that these entities have a
necessary inner connection because they are all value-forms
differentiated as circulation-forms. Though the circulation-forms
constitute a logically self-contained totality, they cannot really be
self-contained without being grounded in a historically possible
mode of production.
All societies require a labour and production process in order
to survive. In order to take root in history, the circulation-forms
must therefore subsume a labour and production process or, in
other words, in order to be really self-contained (i.e. to not be
simply logically self-contained but to exist historically), the
circulation-forms must also be self-determining. The Doctrine of
Production is not deduced from the Doctrine of Circulation.
Instead M -C-M is now looked at from the point of view of how
it is possible for a social totality to operate according to
190 Dialectical Materialism

M-C-M'. The key is the subsumption of the labour and


production process, and this, of course, requires the com-
modification oflabour-power. The Doctrine of Production looks
at the interpenetration of the production process and the
circulation process in order to specify fully the reproduction
process of capital. The logic involved is not the movement
between discrete entities, but is the interpenetration of the
circulation process with the production process.
Finally a purely capitalist society is market-governed so that in
order to complete the dialectic it is necessary to consider more
concretely how the market can fully govern socioeconomic life.
This requires the Doctrine of Distribution which explores the
ways in which the law of value manages technology, land, trade
and money. In this case the logic involves the overcoming of
obstacles that are apparently alien to the market so that capital
can return to itself and operate itself according to its own market
principles. The theory of profit shows how capital manages
technological differentiation and innovation according to com-
modity-economic logic. The theory of rent shows how land is
managed by the law of value. The theory of interest shows how
capital becomes an automatically interest-bearing force once it
manages itself according to market principles. Thus the three
doctrines follow each other in a logical sequence which moves
from the abstract to the concrete in reaching closure with the full
synthesis of the inner logic of a purely capitalist society.
The dialectic of capital constitutes a self-contained, self-deter-
mined and self-revealing dialectical totality with a necessary
beginning, a necessary unfolding and a necessary closure. Such a
dialectic is possible because capitalism is sufficiently self-purify-
ing that we can let this purification complete itself in theory
arriving at concepts that are purified of contingency just as are
Hegel's philosophical universals. In a purely capitalist society, all
production is production of commodities by commodified
labour-power. Reification is total and the market completely
governs socioeconomic life. The result is that pure economic
categories are at the same time social categories. The inner logic
of capital is theorized without artificially abstracting from social
reality and thereby reducing the economic to the purely material-
technical.
The starting-point or the given is a purely capitalist society, and
the dialectic of capital reveals its inner logic. Sekine does not
The Uno/ Sekine Approach 191

impose a logic on the subject-matter from the outside. Instead he


discovers the logic which is embedded in the subject-matter and
lets that logic guide his theorization. To the extent that he is
successful in letting the logic emerge from the subject-matter, the
theory that traces that logic can be said to be objective. The
theory is objective because the knowing subject does not add
anything from his own imagination but is instead entirely guided
by the logic of the object of knowledge. This of course is not
possible with all objects of knowledge since a prerequisite for such
a method to be successful is an inner logic which is tending to
reveal itself, or which can be fully brought to light.
Before I go on to the next section, more needs to be said about
the self-revealing character of the capitalist dialectical totality. I
do not mean by this that in its maturity capitalism becomes
completely transparent, but rather that as it becomes fully
developed, the economic relations of capitalism become sufficien-
tly purified in the sense of sloughing off pre-capitalist and extra-
economic contingencies, that it becomes possible to theorize the
inner logic of capitalism. The dialectical logic of the theory then
becomes the expression of the inner logic of capital without the
need for any concepts or logic brought to bear from the outside.
At the same time as the inner logic is self-revealing in this sense,
capitalism is necessarily opaque. The very reification and fetish-
ism of commodities that makes a dialectic possible, also makes
the inner logic of capital not immediately transparent in its outer
appearances. A part of the self-revelation of capitalism is the
revelation of the necessary opaqueness of an ecomonic system
which subsumes real economic life to commodity-economic
principles. Thus to say that mature capitalism tends to reveal
itself does not at all imply transparency in the sense that an
immediate reading of its appearances will spontaneously reveal
its inner workings.
That capitalism tends to reveal itself is evidenced by the fact
that political economy develops as a science only with the
development of capitalism. Abstract labour, for example, only
becomes sufficiently manifest to be conceptualized with capital-
ism. Adam Smith was the first economist to conceive labour in
general as the source of wealth in general. Ricardo went further
than Smith in developing a consistent labour theory of value only
he failed to grasp fully the specific form of value creating labour
and of surplus value. Capitalism reached its fullest maturity in
192 Dialectical Materialism

England in the 1860s, and it was here that Marx was first able to
place political economy on firm scientific foundations. 'Classical
political economy stumbles approximately onto the true state of
affairs, but without consciously formulating it. It is unable to do
this as long as it stays within its bourgeois skin.'6 By the 1860s the
proletariat and the socialist movement were sufficiently well
developed that Marx was able quite definitely to get outside the
bourgeois skin that limited Smith and Ricardo. It is no accident
that the development of political economy parallels the develop-
ment of capitalism, and this is because the self-purifying and self-
abstracting tendencies of capitalist reification make it possible for
theorists to arrive at ever more general, abstract and pure
concepts which at the same time accurately grasp the inner
essential workings of the capitalist economy.

3 DIALECTICAL MATERIALISM

In explicating the dialectical character of the theory of a purely


capitalist society, I have focused on the similarities between
Hegel's dialectic and the dialectic of capital. Now in order to
bring out the materialist character of the dialectic of capital, it is
necessary to focus on some of the differences between it and
Hegel's dialectic.
With Hegel the material sensuous world is the manifestation of
the reason and wisdom of the Absolute. But the Absolute can
only be so rigorously theorized because in the pure concepts of
metaphysics no trace of sensuous materiality remains that could
introduce elements of contingency. Materiality does not disap-
pear altogether, but is inactivated as a passive substrate so that it
cannot interfere with the necessary inner connections of the
metaphysical ideas. But because Hegel's 'Nothing' (in the basic
'Being'/,Nothing' contradiction) does not represent this passive
materiality but instead total void, The Logic becomes trapped
within absolute idealism. 7 There is no principle internal to the
dialectic which would permit Hegel to move to more empirical or
historical levels of analysis by reactivating materiality while
remaining grounded in the logic. Consequently the notorious
inadequacy of his dialectic of nature, whi'ch, instead of reintro-
ducing materiality into the dialectic, imposes an alien logic onto
the activity of natural science. Because Hegel's 'Nothing' is a
The Uno/ Sekine Approach 193

mere shadow or ghost of 'Being', 'Being' meets no opposition


from 'Nothing', but this means that 'Being' must revolve around
itself without any possibility of breaking out and making any real
contact with materiality. Thus the inadequacy of the dialectic of
nature is closely related to the original inadequacy of the 'Being' /
'Nothing' couplet in the Logic.
The dialectic of capital does not have this problem since unlike
Hegel's 'Nothing', 'use-value' is material and substantial. The
theory of a purely capitalist society neutralizes and pacifies use-
values so that the law of value can display its necessary logic. The
logic of capital or pure theory provides a framework of necessary
relations which act to guide the analysis of contingencies which
arise in stage theory and historical theory. Since use-values by
themselves are heterogeneous and discreet, they do not possess
their own logic. It is possible to arrive at an inner logic at the level
of pure theory because reification neutralizes or deactivates use-
values, but where use-values are reactivated at more concrete
levels of analysis the inner logic becomes increasingly disrupted
by contingency.
Implied by what I have just argued is an important difference
between necessity in Hegel's dialectic and in the dialectic of
capital. With Hegel's dialectic, rational necessity permeates the
universe so that even contingency is rationally necessary. Nothing
escapes the cunning of reason whose hold on the world is truly
absolute. The 'cunning of capital' is different. It only takes hold of
the world to the extent that the production of use-values can be
completely governed by the commodity-economic principle or by
the market. In fact it turns out that only a certain range and
certain types of use-values can be capitalistically managed
through the market alone, so that capitalism is historically limited
and only achieves a partial hold on historical reality. The cunning
of capital is therefore not so all-powerful and there is an outside
into which it does not reach. The necessity of the law of value is
only absolute over socioeconomic life in a purely capitalist
society. At lower levels of analysis it is impinged on by
contingencies or even by necessity (in the sense of structural
tendencies) that arises outside itself. Pure theory, then, provides
an objective foundation for social science, but it does not
encompass all of social science within its own logic. The cunning
of capital does not have a stranglehold on the world the way the
cunning of reason does for Hegel.
194 Dialectical Materialism

All dialectics are teleological in the sense that they must achieve
closure, but the dialectic of capital is not teleological in the same
sense as Hegel's dialectic. The teleology of the dialectic of capital
involves the overcoming of the contradiction between value and
use-value. This is achieved in a purely capitalist society where the
self-realization of capital is allowed to complete itself. To refer to
the content of the dialectic of capital as the law of value is then
accurate because the entire theory involves various metamor-
phoses of value as it completes its motion in subsuming all use-
value obstacles, or, in other words, in subsuming the totality of
socioeconomic life. The teleology in this case is logical and not
historical, so that though the dialectic reaches closure with the
commodification of capital in the form of interest, this says
nothing about the historical destiny of capitalism. For the
dialectic to be possible in the first place, there must be some
tendency for capitalism to realize itself in history, but the actual
course this takes and how it comes to an end is not a part of the
dialectic. The subject/object of the dialectic of capital is capital.
The dialectic of capital only shows how capitalism necessarily
operates when it is allowed to be most fully itself. The historical
genesis of capitalism or its historical demise must be studied at
other levels of analysis and not at the level of pure theory. With
Hegel, reason actually comes to realize itself completely in
history; whereas with our dialectic, capital only partially realizes
itself because of its limited ability to overcome the resistance of
concrete use-values.
My interpretation of dialectical materialism indicates that
Marx's much maligned 'copy theory' or 'reflection theory' of
knowledge was on the right track. What makes the dialectic of
capital objective is that it copies the self-reifying tendency of
capitalism in arriving at the notion of a purely capitalist society
and then copies the logic inherent in such a society. This does not
imply that the law of value is a mere mental reflex since that would
mean that capitalism was transparent. What I have in mind is a
complex copy theory in which a tradition of discourse called
'political economy' develops with the development of capitalism.
Smith and Ricardo partially discovered the inner logic of capital,
but only partially because capitalism itself was only partially
developed, because of their unfamiliarity with dialectics, because
of their 'bourgeois skins', and for various other reasons. Marx
was working within a tradition of discourse which he was able to
The Uno/Sekine Approach 195

advance because he escaped the above-mentioned limitations.


The complex copy theory that I have in mind does not imply that
Marx did not have to work very hard in arriving at his theory.
Here it is necessary to separate the method of inquiry and the
method of presentation. It was only by achieving total mastery of
his subject-matter through arduous study that Marx was finally
able to adopt a passive stance and let the logic inherent in capital
manifest itself without his interference. Marx's discovery of
reification was crucial to his understanding the self-synthesizing
character of capitalism, and his knowledge of Hegel's dialectic
was crucial to ordering the sequence of categories in Capital, even
if he strays from a strict dialectical sequence.
Because Hegel's 'Nothing' provides no substantial opposition
to 'Being', his dialectic as a whole is somewhat artificial in the
sense that the categories could easily collapse into each other.
This lack of differentiation in Hegel's dialectic, or this tendency
for differentiation to collapse back into a simple unity, is not a
problem with the materialist dialectic of the law of value, and this
is because the economic categories are materially differentiated
forms of value clarified by value really overcoming or absorbing
use-value and not by a shadow-play between 'Being' and
'Nothing,.8

4 CONCLUSIONS

There is no end to the possible interpretations of 'dialectical


materialism' if the concept is not derived from a theory which
gives us objective knowledge and is at the same time both
dialectical and materialist. I have indicated in outline that the
theory of capital first developed by Marx in Capital is potentially
such a theory. It is a theory which is about social relations which
have become materialized and objectified through the self-expan-
ding motion of capital. It is a theory which is dialectical in the
sense that it traces the self-synthesizing inner logic of cpaital, and
shows that a purely capitalist society is a self-contained, self-
determining and self-revealing dialectical totality. Therefore the
basis for the understanding of 'dialectical materialism' should be
the dialectic of capital.
If the dialectic of capital is the basis of the concept 'dialectical
materialism', there is reason to suspect that there may be no
196 Dialectical Materialism

dialectic of history or of nature. No one has yet constructed a


theory of the inner logic of nature with a necessary beginning,
unfolding and closure. It seems unlikely that such a theory could
be constructed unless nature becomes 'grey', but the idea of a fully
developed universe may be absurd. It also seems unlikely that
nature would tum out to have a single self-synthesizing inner
logic. Furthermore, there is reason to suspect that there is no
dialectic of history. What would be the necessary beginning and
basic contradiction of such a dialectic? How could it reach
closure? Would it not have to be written by the last humans just as
humanity was coming to an end? No dialectic of history has ever
been written. One almost hopes that none will be written, since
the prospect of history becoming 'grey' is not appealing. It does
not appear possible to write even a dialectic of feudalism much
less of all human history. The dialectic of capital is possible
because it is a piece of history delimited by reification to
constitute a dialectical totality. This totality has the unique
properties of being man-made and of being objectified in the
sense that it is governed by the motion of commodities. It is an
objectified, delimited, sociohistorical institution, which, though
social, escapes human control and achieves a logic of its own. In
Part I of this book, I tried to show how the law of value can serve
as an objective foundation for the study of capitalism. In this
chapter I have tried to show how the dialectic of capital can
clarify the meaning of 'dialectical materialism' and the relation
between Hegel and Marx. In the next chapter, I shall draw out
some of the implications of this approach by critically analysing
three of the most innovative and important theorists in the
tradition of Western Marxism: Lukacs, Althusser and Colletti.
8 A Critical Analysis of
Some Western
Approaches to Dialectical
Materialism
To Marxists 'dialectical materialism' has generally referred to the
basic ontology and epistemology of Marxist theory. Neither
Marx nor Engels gave a very well worked out or convincing
account of 'dialectical materialism' with the consequence that
from their day to this there has been almost continual controversy
over the meaning and import of this basic concept. Since it is the
most fundamental concept of Marxist philosophy, it is also the
one over which the major schools of interpretation most clearly
divide. At the one extreme are intepretations which argue that the
universe is basically matter in motion, and that this motion occurs
according to the basic principles of dialectics. At the other
extreme, and increasingly in recent years, are schools of Marxist
thought which tend either to reject dialectical materialism or to
redefine it so that dialectics is sacrificed to materialism or
materialism to dialectics. 1
To explore the basic cleavages within Marxist philosophy, no
issue is more decisive than the relation between Hegel and Marx,
and more specifically the question of dialectics. Does Marx
simply historicize and materialize the Hegelian dialectic by
locating the prime mover in the historical unfolding of class
struggle as opposed to Hegel's Absolute Idea? This position put
forward by Lukacs in History and Class Consciousness is sharply
disputed by Althusser who sees a radical break between the
Hegelian and Marxian dialectic. According to Althusser the
Marxian dialectic is not simply an inversion of the Hegelian; it is a
distinct epistemology with only superficial similarities to Hegel's
spiritual/expressive dialectic. Contrary to Althusser, Colletti does
197
198 Dialectical Materialism

find dialectical logic in the Hegelian sense present in Marx's


Capital, but cannot reconcile this with the general claim that
Capital is a work of science. Colletti sees Capital as an effort to
combine moral and critical philosophy with materialistic science,
but for him these two do not combine very well so that the
integrity of the theory is in continual jeopardy.
The early Lukacs, Althusser and Colletti all have important
things to say about dialectical materialism, and all three have
been influential. A critical evaluation of these three thinkers will
enable me to develop a dialogue between some of the major
debates over dialectical materialism within Western Marxism and
the Japanese Uno School.

1 LUKACS: DIALECTICS AS REVOLUTIONARY


PRACTICE

The essays collected together in Lukacs' History and Class


Consciousness were written between 1918 and 1922. The underly-
ing political motive of these philosophical essays is to attack the
reformist and positivist tendencies in the theory of the Second
International in favour of a Marxian epistemology that puts class
struggle and revolution not only at the centre of Marxian politics
but also at the centre of Marxian science and knowledge. Lukacs
launches a sweeping attack against bourgeois thought and its
manifestations within Marxism, because it essentially supports
and confirms the capitalist status quo by separating thought from
action, form from content, subject from object and individual
from society. Lukacs argues that under the regime of bourgeois
philosophy thought becomes compartmentalized and formalized
as if the principle of divide and rule were applied to the mind in
order to pacify the realm of ideas. Without cross-fertilization
between ideas or between theory and practice, thought becomes
sterile and impotent. A sort of cordon sanitaire is drawn around
disturbing problems so that they can be dealt with in isolation and
not be seen as symptoms of some larger disease that may
ultimately indicate a radical anti-capitalist cure. In opposition to
bourgeois thought, which is so reified and contemplative, Lukacs
formulates the Marxian dialectic relying upon proletarian revolu-
tion to dissolve all the rigid separatenesses of bourgeois thought.
Reality itself becomes fluid and can be completely grasped in
Critical Analysis of Some Western Approaches 199

thought in the process of being revolutionized in practice. In this


way the revolutionary practice of the proletariat is the key to both
the realization of communism and of knowledge, and the
dialectic, which was essentially contemplative in Hegel's philoso-
phy, becomes essentially activist in the hands of Marxism.
Lukacs sees 'deep affinities' between Marx and Hegel 'for both
conceive of theory as the self-knowledge of reality,.2 For Hegel,
reality can attain knowledge of itself only to the extent that the
unfolding of the Absolute Idea has been realized within concrete
reality itself. The vehicle for this self-knowledge is philosophy or
the philosopher, but the philosopher is essentially the instrument
of the Absolute Idea which is the ultimate subject and object of
history. It is the concretization of the dialectical unfolding of the
Absolute that constitutes history. History is essentially the self-
realization of the Absolute, and knowledge is the Absolute
coming to know itself through its coming into full being. The
problem with this approach, according to Lukacs, is that in the
end Hegel's dialectic does not really 'overcome the duality of
thought and being, of theory and practice, or subject and object'.3
This is because the subject-object of history is the ahistorical,
spiritual and essentially alien Absolute. 'Hegel was unable to
penetrate to the real driving forces of history ... he remained
imprisoned in the Platonic and Kantian outlook, in the duality of
thought and being, of form and matter, notwithstanding his very
energetic efforts to break OUt.'4 This is because the subject-object
is located outside of history with the result that it is not human
society that comes to know itself but the Absolute. Marx's great
achievement and his essential difference from Hegel is his location
of the subject-object within history so that the dialectic becomes
thoroughly historicized.
Lukacs argues that for Marx history is a social process and is an
outcome of human activity.5 Pre-capitalist history is the uncon-
scious product of human activity that is only partially socialized.
The universalization of commodity production and exchange
creates a society where man becomes a truly social being, and the
development of the proletariat results in a class which can make
history consciously. The proletariat, then, is the subject-object of
history because:

for the proletariat the total knowledge of its class-situation was


a vital necessity, a matter of life and death; because its class
200 Dialectical Materialism

situation becomes comprehensible only if the whole of society


can be understood and because this understanding is the
inescapable precondition ofits actions.... From its own point
of view self-knowledge coincides with knowledge of the whole
so that the proletariat is at one and the same time the subject
and object of its own knowledge. 6

In order to carry out its historical role successfully, the proletariat


must understand history and its place in history. Thus for the
proletariat self-knowledge coincides with the knowledge of
history; knowledge of self (the proletariat) coincides with
knowledge of the object (history). Since the historical role of the
proletariat is to carry out a socialist revolution, it is only in the
process of revolutionary transformation that knowledge of
subject and object finally coincide and the proletariat finally
realizes its destiny as subject-object of history.
The point of view of totality represented by the proletariat
must continually struggle against the reification of capitalist
society. Reification refers to a situation where man-made things
come to dominate over the men who made them. With the
generalization of commodity production, social relations come to
be dominated by the motion of commodities in the market. In
Capital Marx refers to cognitive misapprehensions that arise
from this domination of things over men as 'fetishism of
commodities'. Lukacs uses the term 'reification' to refer to the
social and intellectual structures that arise in bourgeois society
from the generalization of commodity production and exchange.
Lukacs's 'reification' is a broader term than 'fetishism of
commodities' because it includes misapprehensions arising from
the commodity-form but also includes all social and intellectual
structures arising from the objectification of social relations
brought about by their subsumption to the commodity-form. For
Lukacs reification is the key to understanding capitalist society,
so much so that he can write:

It has often been claimed - and not without a certain


justification - that the famous chapter in Hegel's Logic treating
of Being, Non-being and Becoming contains the whole of his
philosophy. It might be claimed with perhaps equal justifica-
tion that the chapter dealing with the fetish character of the
commodity contains within itself the whole of historical
Critical Analysis of Some Western Approaches 201

materialism and the whole self-knowledge of the proletariat


seen as the knowledge of capitalist society (and of the societies
that preceded it).7

or again; the problem of commodities must not be considered


in isolation or even regarded as the central problem in
economics, but as the central, structural problem of capitalist
soc:ety in all its aspects. Only in this case can the structure of
commodity-relations be made to yield a model of all the
objective forms of bourgeois society together with all the
subjective forms corresponding to them. 8

Reification gives rise to the characteristic antinomies of


bourgeois thought with subject being divorced from object,
theory from practice, form from content, part from whole and the
individual from society. With the rise of capitalism for the first
time the economic structure of society becomes unified and
dominant so that it serves as the material basis for a unified
consciousness characterized by reification. The subsumption of
human relations to the commodity-form makes them subject to
economic calculation so that the process of capitalist rationaliza-
tion is formalistic in the sense that the parts - firms or specialized
disciplines - are subjected to precise rational calculation of details
but the whole remains ruled by chance. Reason can achieve
formal self-consistency and precision within each part, but since
the part remains divorced from the whole which gives the part its
substantial content, the result is formally rational parts embed-
ded in a substantially non-rational whole. The divorce between
form and content, part and whole produces a bifurcation in
reason between formal and substantive reason. 9

the contradiction that appears here between subjectivity and


objectivity in modem rationalist formal systems, the entan-
glements and equivocations hidden in their concepts of subject
and object, the conflict between their nature as systems created
by 'us' and their fatalistic necessity distant from and alien to
man is nothing but the logical and systematic formulation of
the modem state of society. 10

Thus the ideal of modem knowledge wavers between math-


ematics which is objective because man-made and physics which
202 Dialectical Materialism

is objective because it grasps a natural reality which is objective


precisely because it is distant from and not interfered with by
human subjectivity (i.e. is not man-made).
For Lukacs there is no clear distinction between knowledge
and class-consciousness. Only classes can know because only
classes can adopt the point of view of totality. But for the
bourgeoisie, knowledge of the contradictions of capitalism
contradict their class interest which would like to see capitalism as
an eternal system. The proletariat is in a privileged position to
know because its class interests are in accord with the dialectic of
history towards human emancipation. The proletariat is in a
privileged position not only to know history but to know what to
do in carrying out its historical role. For Lukacs there is no
problem in the relation between theory and practice since the
correct theory can directly determine the correct practice.

Thus dialectical materialism is seen to offer the only approach


to reality which can give action a direction. The self-
knowledge, both subjective and objective, ofthe proletariat at a
given point in its evolution is at the same time knowledge of the
stage of development achieved by the whole society.... It is to
know the direction that determines concretely the correct
course of action at any given moment - in terms of the interest
of the total process viz. the emancipation of the proletariat. II

Knowledge and self-knowledge become the same, the self-


knowledge of the proletariat and the knowledge of the whole
society become the same, and finally this total knowledge
determines the correct course of action.
Even Engels failed to grasp the most vital interaction of
dialectical materialism, 'namely the dialectical relation between
subject and object in the historical process'Y For Lukacs this is
central because the aim of the dialectical method is to change
reality and this necessitates theoretical emphasis on a subject
overcoming and remaking an alien object in the subject's own
image. 13 Revolutionary change is so central that theory is
subordinated to it, so much so that 'theory is essentially the
intellectual expression of the revolutionary process itself'. 14
'Praxis is central to the possibility of dialectics because 'the
essence of praxis consists in annulling that indifference of form
towards content that we found in the problem of the thing-in-
Critical Analysis of Some Western Approaches 203

itself." ,IS The divorce between theory and reality is overcome by


making theory pragmatic.
Theory and reality are melted together by theory becoming
pragmatic and by the fact that 'the objective forms ofthe objects
are themselves .transformed into a process, a tlux'.16 Theory is
action-oriented so as not to deteriorate into the bourgeois
ideology that is a product of reification:

Every comtemplative, purely cognitive stance leads ultimately


to a divided relationship to its object.... For every purely
cognitive stance bears the stigma of immediacy, that is to say, it
never ceases to be confronted by a whole series of ready-made
objects that cannot be dissolved into processes. Its dialectical
nature can survive only in the tendency towards praxis and in
its orientation towards the actions of the proletariat. 17

This is a very strong statement, for it claims that thought itself


cannot dissolve ready-made objects into processes, and that this
requires praxis. Ultimately it is only praxis that can make thought
dialectical because otherwise the subject/object split undermines
the dialectical process.
Lukacs's formulation of dialectical materialism is very appeal-
ing because there is a very strong activist, critical and utopian
thrust in the Marxian tradition. The Marxism of the young
Lukacs represents a longing for a unified world where there is no
real separation between subject and object, self and other in the
face of the radically atomized and fragmented world of capital-
ism. This vision of a more unified world is very attractive in a
world that is so disunified. The appeal of Lukacs's interpretation
of dialectical materialism is its thrust towards radical criticism,
moral vision and revolutionary activism, but this appeal is
achieved at the cost of undermining dialectical reasoning as a way
of attaining objective knowledge. But Marxism must encompass
both moral vision and science, and the romanticism of the young
Lukacs arrives at a very one-sided Marxism - a critical re-
volutionary Marxism cut off from its scientific and materialist
side. 'Dialectical materialism' falls apart into its two component
concepts, and 'dialectics' is made triumphant by sacrificing
'materialism' .
Lukacs is quite correct in emphasizing the importance of the
category 'totality' to dialectical thinking. The problem is his loose
204 Dialectical Materialism

usage of the concept sometimes to refer to all of history and


sometimes to refer primarily to capitalism and his tendency to
ignore problems in arriving at accurate and objective knowledge
of the 'totality'. Lukacs refers to history as a dialectical totality,
and yet he does not construct a dialectical theory of history with
its necessary unfolding of an original contradiction. The fact that
the only dialectic of history to be written has been idealist (Hegel)
suggests that history does not form itself into a totality which is at
once both self-determining and materialist. Instead of construct-
ing a materialist dialectic of history that would give a scientific
grounding to his theory, he simply assumes history is a dialectic.
This enables him to see proletarian revolution as the outcome of a
teleology; and, since dialectical logic is a necessary unfolding,
proletarian revolution is necessary. But unfortunately there is
nothing scientific in all this. Instead moral vision and wish
fullfilment are dressed up in the language of dialectics.
One of Lukacs's major theoretical contributions is the recogni-
tion that reification is central to capitalism. But here again his
contribution is partially undermined by a loose and one-sided use
of the concept 'reification'. Instead of seeing that it is precisely
reification that makes it possible for Marx to construct a theory
of the laws of motion of capitalism which can serve as the
scientific grounding of Marxian social science, he only sees
reification as the central concept of a cultural totality that must be
overthrown. But reification has both of these aspects, and the two
aspects need to be kept distinct though not unrelated. Thus
because of reification, we can construct a dialectic of capital that
reveals the necessary inner connections of the capitalist mode of
production. Besides making a science of capital both necessary
and possible (science is necessary because capitalism is not
transparent), reification also is the material base of bourgeois
ideology, and hence the demystifying ofreification can serve as a
basis for criticizing bouregeois ideology. But this critique of
capitalist ideology needs to be carefully derived from the dialectic
of capital so that it is grounded in Marxian social science.
Contrary to this approach, Lukacs ignores the law of value and
develops a critique of the bourgeois cultural totality based
entirely on the concept of reification. The result is a bifurcation
between cultural criticism and social science. The criticism of
bourgeois culture as a whole becomes very abstract and divorced
from history. It becomes easy then to reify 'bourgeois culture' and
Critical Analysis of Some Western Approaches 205

tum it into an all-encompassing main enemy. To combat this


moralistic and idealistic tendency, it is important to derive
carefully the basic capitalist ideological forms from the dialectic
of capital and then to historicize the content of capitalist ideology
by moving through stage theory to historical analysis. Thus the
abstract and formal 'bourgeois ideology' is filled in by analysing
first mercantilist, liberal and imperialist ideologies, and then with
historical/empirical analysis as, for example, ideology in Britain
in the 1840s.
Besides understanding the role of 'reification' in both the
dialectic of capital and ideological criticism, it is also important to
understand the key role of this concept in thinking about the
transition to socialism. Socialism is primarily the overcoming of
reification in the sense that a society governed by the self-
regulating market and hence by prices and profits is replaced by
one in which society re-appropriates control over the economy. It
becomes democratically organized to meet social needs. Both the
dialectic of capital and ideological criticism can aid in understan-
ding the nature of reification and in overcoming it at the level
both of economic structures and processes and at the level of
thought processes and cultural production.
According to Lukacs, 'theory is essentially the intellectual
expression of the revolutionary process itself .18 Presumably the
proletariat will attain knowledge as subject-object of history at
the moment of revolution. In the process of revolution, reality
itself becomes fluid; but if this is the case, then objectivity
becomes a protean form that changes as we attempt to grasp it. At
the moment that the proletariat arrives at knowledge of reality,
reality itself dissolves into shapeless flux. At this point knowledge
dissolves into 'making' resulting in extreme voluntarism.
It is true that theory and practice are related in Marxism, but it
is inaccurate to call this relation 'dialectical' unless one is using
the term very loosely to mean 'interaction'. To speak of 'the unity
of theory and practice' as Lukacs does, tends to cover over the
complex and complicated relationship between theory and prac-
tice. The theory of a purely capitalist society or the dialectic of
capital frees itself from contingency because it copies the self-
purifying and self-reifying tendencies of capitalism. At this level
of abstraction, we can refer to necessity in the strong sense, as, for
example, in the necessity for a general rate of profit to form. At
the level of practice there is less necessity, and it is sometimes
206 Dialectical Materialism

nearly swamped by contingency. Strategic theory must be based


largely on experience and practical wisdom, and cannot have the
same kind of necessity that we associate with the laws of motion
of capital. The notion of a unity of theory and practice can lead to
the celebration of the diversity of the concrete at the expense of
theory, or it can lead to the celebration of the iron necessity
of theoretical laws at the expense of the concrete. If Marxists
attribute the same necessity to positions of political strategy as
they do to economic laws, then they are committing the error of
dogmatism. If, on the other hand, they eschew theory in favour of
the concrete and spontaneism, they are giving up the commitment
to rationalism and science that is so important in the Marxian
tradition. The solution to this problem is the full development of
the complex of mediations between various levels of theory and
between these levels of theory and various kinds of practice.

2 ALTHUSSER: DIALECTICS AS COMPLEX


STRUCTURE

The major preoccupation of Louis Althusser in his two most


important and influential epistemological works, For Marx and
Reading Capital, is to rid Marxism of the pernicious contamina-
tion of Hegelianism. It is Althusser's firm belief that Hegelian
influences have undermined the scientificity of Marxism, so that
the twin tasks of ridding Marxism of Hegelian influences and of
establishing firm scientific foundations for Marxist theory nearly
coincide.
According to Althusser, the Hegelian dialectic begins with 'an
original simple unity' which divides because of negativity. The
resulting contradiction is superseded in a succession of totalities
representing an ever more concrete restoration of the original
simple unity until the negativity is completely overcome in a final
totality which realizes all the possibilities inherent in the original
simple unity. Each totality is the supersession of the previous one
because it represents the truth of the latter in a more developed
form. Each totality or unity is a 'centred' or 'expressive' totality in
the sense that the central idea or essence permeates the whole so
that each part is simply a particular expression of this abstract
essence. This means that within the Hegelian problematic there is
no real otherness, autonomy or externality. There are no real
Critical Analysis of Some Western Approaches 207

breaks in history because each epoch simply represents the truth


of the previous epoch raised to a higher level. Also within each
totality, the parts as expression of the inner essence lack any
substantial autonomy. As a result everything is internal to
everything else, there is no substantial externality or even relative
autonomy. History is a sort of circle with a simple beginning and
an end which represents a return to the original unity only now
with all the original potentialities realized. The Hegelian
problematic is therefore both genetic and teleological in charac-
ter.1t is also a simple, centred, expressive totality because there is
no real externality or autonomy of parts, but rather complex
concreteness is reduced to the manifold expression of a simple
inner essence.
For Althusser the Marxian theory of history stands in stark
contrast to the Hegelian problematic. First, for Marx history has
no beginning and no end; dialectical materialism is neither genetic
nor teleological. Second, for Marx there are real breaks in history;
the succession of modes of producton is not a supersession, but is
instead a succession of distinct and different structural forma-
tions. Third, the Marxian totality is a complex structure of
relative autonomous practices unified not by a centred abstract
principle, but by a decentred structure-in-dominance. The Marx-
ian totality is therefore a complex, structured totality that
contains externality in the form of breaks in history and relative
autonomy of parts within the totality.
The lack of autonomy in the Hegelian problematic applies also
to the relation between knowledge and being. According to
Althusser, with Hegel the real order follows the logical order, or
in other words, the real concrete represents the concretization of
the logical. The process of reality and the process of knowledge
are parallel, so that knowledge is simply the self-consciousness of
the present purified by philosophy. Hegel then represents the
logical-historical method in its purest form. The logical and
historical parallel one another, and the historical is the con-
cretization of the logical. There is no break between the logical
and the historical but instead an interpenetration.
The disjunction or relative autonomy that Althusser establi-
shes between theory and history leads him to reject all reflection
theories of knowledge which see knowledge as a direct reflection
of reality or reality as a concretization of knowledge. 'We must
completely reorganize the idea we have of knowledge, we must
208 Dialectical Materialism

abandon the mirror myths of immediate vision and reading, and


conceive knowledge as a production,' 19 For Althusser knowledge
is a process of production, and the object of knowledge as a
theoretical object must be clearly distinguished from the real
object.
Althusser argues that classical epistemology loses itself in the
fruitless task of searching for guarantees of the possibility of
knowledge, when the appropriate question to ask is 'By what
mechanism does the object of knowledge appropriate the real
object?,2o Althusser never answers this question, but he claims
that by posing it, he is freeing us from the fruitless question of
guarantees. According to Althusser, a scientific theory is one that
is adequate to its object of knowledge and real object, but the
criteria of validity are always internal to each scientific
problematic.
A scientific problematic establishes itself by criticizing previous
ideological problematics. It distances itself from these ideologies
by showing both why and how they are one-sided or in other ways
inadequate to the object of knowledge. Althusser claims that
Marx's Capital is the founding work of a new science, and in
order to understand the distinctiveness of this science, it is
necessary to explore the 'epistemological breaks' that Marx
makes with classical political economy and with Hegel. As a
result of his studies, Althusser comes to the conclusion that
Marx's Capital is the founding work of historical and social
science much as Euclid's work founded the science of math-
ematics and the work of Galileo and Newton founded natural
science. Marx's Capital is of such fundamental importance that
'the theoretical future of historical materialism depends today on
deepening dialectical materialism, which itself depends on a
rigorous critical study of Capitaf. 21 I entirely agree with this
statement, but Althusser himself does not carry out such a study
in sufficient thoroughness. He examines the epistemological
breaks between Marx and both Smith and Ricardo, but he does
not examine the substance and adequacy of Marx's economic
theory as a theory of the capitalist mode of production nor does
he develop the relation between the object of knowledge (the
theory of capital) and the real object (capitalist history). Failure
to develop his theory in these directions has left his followers to
flounder in a sea of confusions.
Dialectical materialism as interpreted by Althusser has very
Critical Analysis of Some Western Approaches 209

little left that could be called dialectical. Althusser's 'dialectical


materialism' is simply the epistemology of historical materialism
or of Marxian social science, and it is arrived at by criticizing the
Hegelian problematic and by amalgamating various forms of
French structuralism which are found to be latent in Marx.
According to Althusser, the only thing that Marx took from
Hegel is the idea that history is a process without a subject. The
historical process is structured by the articulation of unevenly
developing relatively autonomous practices unified by the struc-
ture-in-dominance and determined in the last instance by the
economic. Dialectical materialism, then, simply refers to the
epistemology of Althusserian structuralism. All that is left of
Hegelian dialectics is the concept of 'process' but now altered to
mean material-historical complexly structured process, and
'contradiction' now altered to mean 'real opposition' and conflict
rather than 'dialectical' contradiction in the Hegelian sense. 22
Despite all protestations to the contrary, Althusser is actually
in many ways more Hegelian than Lukacs. The trend of
Althusser's thinking is to move closer to the Hegelian emphasis
on dialectics as a method of objective knowledge. A large part of
Althusser's attack on the Hegelian problematic is directed at
thinkers like Lukacs who use it to tum Marxism into a secular
religion. Althusser brings to the fore the question of the
objectivity and scientificity of Marxism. By asking many of the
right questions, Althusser sets the stage for a reappropriation of
dialectics as the method of objective knowledge, even though
Althusser's own solution to the problem of objectivity is an
eclectic amalgam that proves to be untenable.
Althusser correctly rejects Lukacs's view that history is one
grand teleological dialectic. He argues that Marx completely
rejected the view that history is teleological. History is not a
dialectical unfolding with a necessary beginning and an inevitable
end.
Althusser holds to the Hegelian view that a theory is true if it is
adequate to its object. This leads him to examine carefully the
theoretical object of Marx's Capital, which Althusser correctly
sees as the founding work of a new science. His problems come
when he tries to derive historical and dialectical materialism from
a careful reading of Capital. According to Althusser, dialectical
materialism is basically the method or epistemology of historical
materialism. Like Lukacs, he sees dialectical materialism pertain-
210 Dialectical Materialism

ing to history as a whole, only he sharply differentiates his


interpretation of dialectical materialism from that of Lukacs by
attacking Lukacs's expressive/spiritual problematic.
In an expressive problematic everything is internal to every-
thing else so that there can be no real externality, differentiation
or autonomy of the parts in relation to the whole. Such a totality
is ultimately simple as opposed to complex because the unifying
factor is a simple centre with the parts being no more than various
forms of expressions of this centre. Thus separate categories are
continually on the verge of collapsing into one another and losing
their distinctiveness. This problematic is manifest in Lukacs in a
variety of ways. His often-quoted 'unity of theory and practice'
fuses together activities whose internal integrity is destroyed if
their relative autonomy is not respected. His notion of the
proletariat as subject-object of history collapses together
knowledge, self-knowledge, history, class-consciousness and re-
volutionary praxis. Capitalism as a totality is often collapsed into
history as a totality so that the distinctiveness of capitalism as a
unique mode of production is often lost. What is characteristic of
capitalism is the relative autonomy of the economic which forms
the base relative to the political and ideological superstructure.
But Lukacs tends to collapse economic categories together with
political and ideological categories so that the distinctiveness of
capitalism is lost. Lukacs uses the concept of reification as though
it were the simple centre of the bourgeois cultural totality
separating and estranging subject from object, form from con-
tent, time from space, part from whole so that the destruction of
reification must result in collapsing together all of these antin-
omies of bourgeois thought. Following Luxemburg, Lukacs fuses
the logical and the historical within Marxian political economy,
though, as Althusser makes abundantly clear, Marx himself is
quite explicit that the logical order and real order do not reflect
each other and the sequence of categories in the theory of capital
do not parallel history.
Clearly grasping the unscientific and even religious tendency of
Lukacs's expressive problematic, Althusser substitutes an epis-
temology largely based on structuralist presuppositions. He still
clings to the Hegelian idea that dialectics must pertain to
knowledge in general or at least to sociohistorical knowledge, but
rejects the expressive problematic of Hegel. He attempts to arrive
at another method of achieving objective knowledge which he
Critical Analysis of Some Western Approaches 211

calls 'dialectical materialism' but which breaks quite significantly


with Hegelian dialectics. History is no longer seen as a single
totality but as a series of totalities which are distinct and not
simply a series of unfoldings of an original genesis. Each totality
or mode of production consists of structures within structures
and processes within processes each relatively autonomous but all
interrelated and unified by a structure-in-dominance. The idea of
process is subordinated to the idea of structure; a process is
simply the complex interraction of structures over time. The
outcome of such a process is always 'overdetermined', meaning
that it is the mutual support and overlapping of many structures
that brings about the result. This is a step forward from Lukacs in
offering a more materialist and scientific approach to understan-
ding history.
Althusser's treatment of the economic, the political and the
ideological as relatively autonomous structures guards against
reductionist tendencies that would collapse the economic into the
political and ideological or vice versa. Althusser is also very clear
on the necessary relative autonomy of theoretical practice and on
the need to separate the logical and the historical thus avoiding all
crude reflection theories. He becomes confused though in relating
the theory of capital to historical materialism in an effort to
construct a general epistemology of history. That he fails fully to
come to terms with the uniqueness of the capitalist mode of
production is evidenced by his effort to arrive at a single
epistemology for all of history. Further, his animosity to the
Hegelian Marxism of the Lukacsian or Sartrean type blinds him
to the actual dialectic present in Marx's Capital and to a serious
consideration of dialectics as a method of objective knowledge.
He is correct to deny that there is a teleological dialectic of
history, but his tendency to counter Lukacs's epistemology of
universal history with another epistemology, prevents him from
considering the possibility that the dialectical part of Marxist
theory is the theory of capital and only the theory of capital, that
the materialist dialectic which provides the objective basis of
historical materialism is precisely the theory of capital, that the
theory of capital is a dialectic of objective knowledge in the
Hegelian sense, and that the differences between Hegel's Logic
and the theory of capital are due to the differences in the
theoretical object in each case.
In opposition to Hegel, Althusser tries to establish objectivity
212 Dialectical Materialism

by positing structures which govern 'both the development of the


object and the development of the theoretical practice which
produces knowledge ofit'.23 He asserts this but does not prove it
or show us how theoretical practice actually relates to the object
and the structure that governs both. A structure that governs
both an object and knowledge of that object is dialectical in
character, but because Althusser does not recognize this, he
remains within a structuralist problematic which makes such
relations ultimately inexplicable. Althusser's structuralism strives
for objectivity by suppressing the subject; whereas the dialectic of
capital achieves objectivity by showing how and why the subject
becomes absorbed into the objective motions of capital in a
purely capitalist society. The dialectic gives us a path to return
from the abstract to the concrete by reactivating the subject;
whereas Althusser's approach posits rigid structures which
permanently swallow up the subject. There is no path back to the
concreteness of history and class struggle.
Theorizing structures without subjects does not make for
objectivity unless the structures have a necessary inner logic so
that they must be this way and not some other way. Now the
structures of capitalism have precisely such a logic and that is
what makes an objective dialectic of capital possible, but
Althusser ignores this in favour of a universal structuralist
epistemology. The theoretical object of Marx's Capital is the
capitalist mode of production, but in Althusser's schema it is not
at all clear how we know that the theory is adequate to the object
or how the abstract theoretical object relates to the actual history
of capitalism.
Althusser attempts to achieve objectivity by substituting
structure for dialectic, but this substitution is not convincing
because it replaces the dialectical subject/object identity with a
structural suppression of the subject. According to Althusser's
approach, the concepts of Marx's Capital are not the constructs
of the subject Marx, but are the distillates of a structure of
theoretical practice which in the last instance is determined by the
structure of the capitalist economy. Thus the theory of capital is a
production without a producer. The relation between structure
and theorist for Althusser is parallel to Hegel's relation between
Absolute Idea and philosopher, only with Hegel the philosopher
is a part of a necessary unfolding totality whereas Althusser's
structures appear as historically specific given without any
Critical Analysis of Some Western Approaches 213

teleology or necessary logic. We can examine all of the various


'epistemological breaks' between Marx and his forebears indefin-
itely, but this does not establish the necessity or objectivity of
Marx's theory. What is it about capitalism that permits us to have
objective knowledge of it? Althusser never fully answers this
question. It remains unclear just how the structure of capitalism
establishes the objectivity of its theory and how Marx the theorist
relates to this structure so that we can say for sure that his
concepts are not simply subjectively constructed analytic con-
structs, but are necessary and objective.
Though Althusser's epistemology ultimately fails, he makes
important strides towards establishing the objectivity and scien-
tificity of Marxism especially in comparison to Lukacs. Most
important is his focus on Capital as the founding work of a new
science and his criticism of the theory of history based on an
expressive problematic. That the place to look for the founda-
tions of dialectical and historical materialism is Capital is a
perspective the importance of which can scarcely be overstated.
His rejection of any grand teleological dialectic of history is also
extremely significant in contributing to a more scientific and
more materialist approach to the study of history. Finally in some
sense he is more Hegelian than Lukacs, because Hegelian
dialectics above all is a method of arriving at objective
knowledge, and though he rejects Hegelian dialectics, his attack
on Lukacs's propagandistic and activist perversion of dialectics
and his concern for objectivity and knowledge is at least a step
towards the spirit of dialectics. Althusser's insistence on the
relative autonomy of theoretical practice sets the stage for re-
establishing the objectivity of Marxist theory on the firm
foundation of the dialectic of capital.

3 COLLETTI: DIALECTICAL MATERIALISM AS


DIALECTIC OF CAPITAL

In Marxism and Hegel, Lucio Colletti puts forward strong


arguments against the orthodox Marxian interpretation of
dialectical materialism. He claims that Hegel was 'the first and
only dialectician ofmatter',24 and that 'All the basic propositions
of the "dialectic of matter" were originally formulated by Hegel
and dialectical materialism has confined itself to transcribing
214 Dialectical Materialism

those propositions from his texts. ,25 'The consequence is that


what Engels and all of "dialectical materialism" after him present
as the highest and most developed form of materialism is none
other than absolute idealism.'26 In other words dialectics is
inherently idealist so that 'dialectical materialism' is really a
contradiction in terms.
Briefly, Colletti's argument runs like this. The basic principle of
materialism is the heterogeneity of thought and being, and this
principle combined with the principle of non-contraction is basic
to all science. This realm of science in which the real opposition of
material forces is studied is called by Hegel the realm of the
intellect. In opposition to this realm, the realm of reason studies
the necessary connections between pure concepts and arrives at a
synthetic or concrete understanding of a self-determined totality
by the logic of dialectical contradiction moving from the most
abstract and empty specifications to more filled out and concrete
specifications. Colletti argues that Hegel's reconciliation of
reason and intellect results in the annihilation of the latter and
with it the basic principle of materialism. If this line of argument
is correct, then the conclusion follows that dialectical reason is
necessarily opposed to materialism and science.
Colletti sees these irreconcilable principles of dialectics and
materialism clung to in a succession of Marxist texts without any
clear comprehension of the contradiction involved.
There is a continual tendency for the two sides of 'dialectical
materialism' to split off from one another and develop into
opposed intellectual tendencies or schools of thought. Works
such as Lenin's The Development of Capitalism in Russia manifest
the materialist and scientific side of Marxism; whereas works
such as Lukacs's History and Class Consciousness represent the
metaphysical and idealist side.27
In Marxism and Hegel Colletti tries to overcome the seeming
antinomy embodied in 'dialectical materialism' by largely reject-
ing dialectics in favour of materialism. Kant replaces Hegel as the
favoured philosophical ancestor. From Hegel Marx extracts.

a profound sense of the unity of logical process and real


process, i.e., the principle of the unity of thought and being
which in Hegel, however, was so imperious as to jeopardize
from the very beginning their real distinction. From Kant ...
Marx clearly derives . . . the principle of real existence as
something 'more' with respect to everything contained in the
Critical Analysis of Some Western Approaches 215

concept; a principle which, while it makes the process of reality


irreducible to the logical process, also prevents us from
forgetting that, if the concept is logically first, from another
angle it is itself a resultant. 2

Colletti attempts to illustrate this argument by an interpretation


of Marx's Capital in which he argues that this work is both
deductive and inductive, and that the logical sequence follows the
real process of history very closely.
According to Colletti the method of the theory of capital is a
logicodeductive method, which 'gradually penetrates the object
in question, departing from the non-essential or generic aspects
and going back to the fundamental or specific ones, from effects
to causes, and (in short) from the most superficial phenomena to
the real basis implicit in them'.29 Starting with non-essential or
generic aspects such as exchange-value and the commodity, Marx
proceeds from these more superficial phenomena to capital and
class which is the real basis. But this logicodeductive movement
from the superficial to the real basis is at the same time an
inductive movement following the course of history so that the:

logical process itself is none other than the synthetic-rational


resume of the entire historical road that preceded the birth of
modem capital. . . the logical deduction from money to capital
represents the essence of the historical movement which
preceded the birth of modem capital. 30

Here Colletti falls into the logical-historical method. What


remains of Hegel in this is a logicodeductive method, but this
method is not very dialectical because the 'contradictions' that it
analyses are not dialectical contradictions but are real opposi-
tions historically specific to capitalismY We are left, then, with an
epistemology which is a slightly Hegelianized Kantianism.
Since writing Marxism and Hegel, Colletti has made a number
of important changes in his position, and it is the New Left Review
article 'Contradiction and Contrariety' that is most important to
look at in this regard. After careful study of Marx's Capital, and
especially of the implications of reification and fetishism, Colletti
comes to the conclusion that the 'contradictions' ofthe theory of
capital are not 'real oppositions' as he had thought before but are
'dialectical contradictions in the full sense of the word,.32
216 Dialectical Materialism

In Marx's view, all the contradictions of capitalism are the


outcome of the contradiction within the commodity between
use-value and value, between useful or private labour and
abstract social labour. The internal contradiction within the
commodity is externalized as the contradiction between the
commodity and money. The contradiction between the com-
modity and money develops in tum into the contradiction
between capital and wage-labour, that is between the owner of
money and the owner of that particular commodity, viz.,
labour-power, whose use-value has the property of being the
source of exchange-value and hence of capital itself.33

The reification that makes the motion of commodities, money


and capital dominate human society, makes it possible to theorize
capital as a true dialectic:

the process of hypostasization, the substantification of the


abstract, the inversion of subject and predicate, far from being
in Marx's eyes modes of Hegel's logic that were defective in
reflecting reality, were in fact processes that he located ... in
the structure and mode of functioning of capitalist society
itself. 34

Hegel separated human thought from man, turning it into an


independent subject called the idea; for him it was no longer the
thinking individual who thinks but the idea or Logos which
thinks itself through man. . . . The effect of the world of
commodities on real men has been similar. It has factually
separated or abstracted from man his subjectivity ... and has
transformed it into a separate essence. 35

Just as Logos is the subject-object of Hegel's dialectic of reason,


so capital becomes the subject-object of the theory of capital.
Capitalism is not simply a society of wealth-maximizing in-
dividuals, rather individuals are used by capital for its own self-
expansion. Thus the capitalist mode of production is called by
Colletti an 'inverted reality'.
Colletti concludes this New Left Review article by juxtaposing
two statements which pose the fundamental question that
Marxist philosphers must face. Firstly, he claims that 'The
fundamental principle of materialism and of science . . . is the
Critical Analysis of Some Western Approaches 217

principle of non-contradiction. Reality cannot contain dialectical


contradictions but only real oppositions, conflicts between
forces, relations of contrariety.'36 Secondly, he states that 'On the
other hand, capitalist oppositions are, for Marx, dialectical
contradictions and not real oppositions.'37 According to Colletti
this seeming contradiction confirms 'the existence of two aspects
in Marx: that of the scientist and that of the philosopher.... The
social sciences have not yet found a true foundation of their own.
Hence I do not know whether the existence of these two aspects is
fatal or advantageous. ,38

4 CONCLUSIONS

Colletti does not see that because of reification the logic of capital
can be constructed as a rigorous scientific dialectic. The inversion
that Colletti speaks of makes such a dialectic possible. Now while
it is true that in the natural sciences the principle of non-
contradiction is fundamental, the dialectic of capital presents an
objective basis for social science based on dialectical contradic-
tion. The key to resolving Colletti's dilemma is to understand the
necessity for levels of analysis. Because capitalism is an inverted
reality it has the capability of remaking the world in its own
image. This means that capitalism will tend to become more
capitalist or will tend to purify itself. This tendency towards the
realization of a purely capitalist society makes it possible to
envision such a society and to theorize its necessary inner
connections as a dialectic. Because of the total reification that
exists at the level of pure theory, real opposition is suspended or
neutralized by the law of value. So although we allow the motion
of value to overcome all obstacles in theory in order to expose the
necessary dynamics of capitalism, we know that real opposition is
simply held implicit. As we move away from the theory of a purely
capitalist society to stage theory or to historical theory, real
opposition increasingly appears. Thus the dialectic of capital is
pregnant with real opposition though at the level of pure theory
real opposition is completely contained with a dialectical logic.
We have arrived at the solution to the problem. The dialectic of
capital is at the same time a rigorous and objective theory based
on dialectical contradiction and a materialist or scientific theory
pregnant with real opposition. The self-purifying tendencies of
218 Dialectical Materialism

capitalism mean that thought and being have a sufficient


tendency to coincide so that a pure theory can be constructed by
following the logic of capital, while the actual recalcitrance of
concrete capitalism ever to become so pure, requires levels of
analysis which recognize the very real contingencies inherent in
conjunctural analysis that insist that we be mindful of the
ultimate heterogeneity of being and thought. On the one hand,
then, it is possible rigorously to theorize the laws of pure
capitalism, and on the other hand, we must take into account
various contingent circumstances that deflect or alter the working
of those laws requiring us to mediate pure theory and historical
analysis with stage theory. It is precisely because capitalism is an
inverted reality that real opposition can be absorbed into
dialectical contradiction so that the theory of a purely capitalist
society can be an objective dialectic. With this discovery social
science finds a true foundation of its own.
Colletti makes advances over both Lukacs and Althusser in
grasping the uniqueness of the theory of capital. He sees it is not
possible to construct a dialectical theory of history, but that the
logic of capital is a dialectic logic. The result is that Colletti
cannot reconcile the claim that Capital is a work of science with
the fact that it contains a dialectical logic.
How then can the theory of capital be both scientific and
dialectical? For Colletti the key to resolving this is the fetishism of
commodities or reification, because it is with this key that we can
understand that capitalism is an 'inverted reality'. The theory of
capital is a scientific theory because its object is the real material
world, but it is at the same time dialectical because the reality in
this case is inverted. Having said this, Colletti still remains
puzzled over just how we can have a theory that is at once both
scientific and dialectical - a theory of this peculiar inverted
reality. Colletti comes very close to the truth of the matter, for
reification is indeed the key to understanding the theory of
capital. His shortcomings stem from his tendency to accept the
logical-historical method, his failure to grasp the precise relation
between the logical and historical in the theory of capital, and a
consequent connecting of the dialectic only with the
critical-revolutionary implications of the theory.
Because capitalism is reified it is self-contained and self-
purifying. This means that Uno and Sekine can arrive at an idea
of pure capitalism not simply by constructing a Weberian ideal-
Critical Analysis of Some Western Approaches 219

type, but by extrapolating the inherent tendencies of capitalism


itself. The result is a dialectical logic of pure capitalism. Sekine
has demonstrated the very close correspondence between the
sequence of categories in Hegel's Logic and the dialectic of
capital. But there are differences, some of which I outlined in the
previous chapter.
In Hegel's case the theoretical object is the necessary inner
connections between abstract philosophical universals, and in
Marx's it is the necessary inner connections of the reified
economic concepts of capitalism. Marx's theoretical object is a
historically specific material reality. Given this, how is dialectical
contradiction able to overcome the real oppositions of material-
ism and of concrete history? In a purely capitalist society we let
value completely subsume the use-value obstacles of real econ-
omic life. Within the dialectic of capital real opposition is
overcome completely by the reifying force of the commodity-
economic principle. Real opposition in the form, for example, of
class struggle between capital and labour is implied by the theory,
but it can be held implicit because of the assumption of the total
sovereignty of value or, what is the same thing, total reification.
But the complex unity of the dialectic of capital does not verge on
collapsing back into a simple undifferentiated unity so character-
istic of spiritual/expressive totalities precisely because real
opposition is implicit in the theory and because the theory does
ultimaely relate back to a historical material reality. Thus wages,
rents and profits appear on the surface to be real oppositions, but
precisely by piercing the reification of capitalism, Marx shows the
necessary inner connections of these three categories and shows
that ultimately they are different forms of value. Hegel's dialectic
is the self-relation of thought, whereas Marx's dialectic is the self-
relation of thought aided by the self-relatedness of a reified
material-social reality. For this reason the dialectic of capital is
not a spiritual totality but is materialist instead.
Here I return to Althusser to show both the partial truth and
the errors in his attack on all reflection theories of knowledge.
Althusser's attack on crude reflection theory has some positive
aspects. It is this theory in conjunction with the logical-historical
method that has produced so much havoc throughout the history
of Marxist theory. The problem is that he makes too much of the
opposition between reflection theory and his own production
theory of knowledge. Any constructivist theory of knowledge
220 Dialectical Materialism

must fall into subjectivism unless the object can be made to do the
constructing. But if the object constructs the knowledge of itself,
the result is a sort of reflection theory which may not be so crude
as the ones Althusser is attacking but which nonetheless shares
some of their common features. In fact dialectics must always
involve some form of reflection theory - perhaps a complex
reflection theory as in the case of the dialectic of capital.
Now it is quite true that the theory of capital is not arrived at by
thought concentrating itself (Hegel) nor by the knowing subject
abstracting from the real concrete. Political economy only
becomes possible with the development of capitalism, and as
capitalism develops so does political economy. It is roughly
accurate to say that capitalism produces knowledge of itself
without denigrating the creative genius of Marx. From the point
of view of objective knowledge, it is not necessary to know the
creative processes that Marx went through in arriving at his
theory; all we need know are the grounds for claiming objectivity.
In this case it is that the theory correctly copies the necessary inner
connections of capitalism. How is this possible? Capitalism is a
self-purifying and self-abstracting economic system. Because the
economic relations become more pure and abstract in reality,
reality aids the mind in completing these processes (which are
never completed in reality) so that the necessary inner connec-
tions between categories can be revealed.
Althusser is of course correct to say that theory moves from the
abstract-in-thought to the concrete-in-thought and not the real
concrete. But he fails to grasp the unique relation between theory
and history peculiar to capitalism: namely that history, because of
its reification in the case of capitalism, can aid in the development
of its own self-understanding. Althusser's failure here leads him
to overgeneralize an objectivity that is only possible with
capitalism. Instead of grasping the dialectical logic of capital and
making that the objective base of historical materialism, he
creates a universal structuralist epistemology which tries to attain
objectivity in general by removing the subject. But it is only the
reified economic life of capitalism that can absorb the subject into
the objective motions of capital and even this is only achieved at
the level of pure theory. Furthermore, Althusser's failure to
understand the specificity of the relation between the theoretical
and historical (or logical and real) in capitalism, leads him to fail
to see the connection between the theory of capitalist society and
Critical Analysis of Some Western Approaches 221

the history of capitalism. Again failing to grasp the specificity of


capitalism, his movement is from theory in general to history in
general, or more concretely from mode of production to social
formation, but this has led to the kind of confusion typified by
'the mode of production debates'.
Let me conclude by briefly summarizing the contributions and
flaws of Lukacs, Althusser and Colletti to our understanding of
dialectical materialism. Lukacs correctly understands the impor-
tance of the category 'totality' and the idea of subject-object
identity for dialectical thinking. He also grasps the key impor-
tance of reification for understanding capitalism. But he fails
because history is the wrong totality to choose, because the
proletariat is the wrong subject-object and because reification is
seen as the centre of a cultural totality and not the basis for a
rigorous and objective economic theory. Althusser correctly
grasps that Capital is the founding work of a new science, but he
completely fails to grasp the sense in which the method of this
science is dialectical and that the dialectic of capital is its objective
foundation. Colletti correctly understands that only Marx's
Capital is both dialectical and materialist, but he fails to reconcile
philosophically dialectics with materialism leaving us with more
questions than answers. The work of Uno and Sekine finally
clarifies our understanding of dialectical materialism by ground-
ing it in the dialectic of capital. The inescapable conclusion is that
if 'dialectical materialism' is to have any definite grounding in
substantive knowledge, it must refer to the dialectic of capital.
The dialectic of capital is the only theory that is both materialist
and dialectical. This is so because of the peculiar objectified and
reified character of the social reality of capitalism. With the
dialectic of capital social science has at last achieved a firm
philosophical foundation.
Part III
Historical Materialism
9 Some Basic Concepts of
Historical Materialism
Chapter 5 was entitled 'The Historical Analysis of Capitalism',
and it explored historiographic issues of capitalism from the point
of view of guidelines offered by pure theory and stage theory.
Because the study of capitalist history is guided by pure theory
and stage theory, it falls within the science of political economy.
But historical materialism must include the study of pre-capitalist
and post-capitalist modes of production which do not have a pure
theory or stage theory oftheir own and which fall outside political
economy. It is my contention that historical materialism is simply
a materialist approach to the study of history. It is not the science
of history, but instead is simply one of many approaches to the
study of history. i What makes it a strong approach is the backing
it receives from the science of political economy. In this chapter I
shall therefore explore the relation between political economy
and historical materialism, and I shall develop some of the
implications of this relationship for basic concepts of historical
materialism.
Part I of this book presented political economy or the science of
the capitalist mode of production. Part II argued that dialectical
materialism should be interpreted as the reconstructed logic of
the science of political economy. To be more precise, the theory of
a purely capitalist society is the only example of a scientific theory
which is both dialectical and materialist. Furthermore, the
coming together of dialectics and materialism depends crucially
on the total reification of a purely capitalist society, and this
implies that pure capitalism is the only theoretical object which
can be both rigorously dialectical and materialist. No one ever
successfully constructed a complete dialectical theory of nature or
of history. If there is no dialectic of history, that means that
history cannot be grasped by a single dialectical theory which
establishes 'the laws of motion of history'. The study of history
225
226 Historical Materialism

cannot be an independent science based on the dialectic of history


the way political economy is a science based on the dialectic of
capital. The interpretation of dialectical materialism in Part II
shows that political economy must constitute the substantive
grounding of Marxist theory. Therefore historical materialism is
derivative of political economy and not the other way around. In
other words, the science of the capitalist mode of production is
not simply the sub-theory of one mode of production within a
larger theory of modes of production in general. Instead the
theory of the capitalist mode of production is fundamental, and it
is this theory which serves as a guide to the study of all other
modes. The Uno/Sekine approach to historical materialism that I
have adopted here makes clear and precise what Marx meant by
the metaphorical expression that 'human anatomy is the key to
the anatomy of the ape'.
The sequence of presentation in this book is essential to the
argument. Part I sets forth political economy as the science of
capitalism objectively grounded in the dialectic of capital. Part II
shows why the dialectic of capital is the only materialist dialectic,
and why, therefore, the dialectic of capital should serve as the
objective grounding of political economy. Part III will develop
the relationship between political economy and historical
materialism by arguing that historical materialism is simply the
study of history in the light of the knowledge established by
political economy.
In this chapter I shall mainly focus on the light that pure theory
sheds on some traditional concepts of historical materialism. I
shall not focus on the relation between the other two levels of
analysis and historical materialism, nor shall I attempt to be
exhaustive in my analysis of the basic principles of historical
materialism. My impression is that the Japanese Uno School has
not done a great deal of work in this area. Uno referred to the
basic principles of historical materialism as 'ideological hypoth-
eses' to distinguish them from the scientific principles of pure
theory. It seems to me that there is still work to be done on
precisely what these principles are and how they are supported by
political economy. This chapter only offers a first small step in
clearing the ground for future theorizing.
In the next chapter I shall look at history as it extends into the
future - the question of the transition to socialism. In so far as
theory is action-oriented and normative, I call it 'ideology'.
Marxist ideology is concerned with criticizing capitalism and
Some Basic Concepts 227

developing strategies to bring about democratic socialism. In


order to make a meaningful start in discussing the relation
between the science of political economy and Marxist ideology, I
shall limit myself primarily to some general guidelines derived
from pure theory. I shall not address the question of how all three
levels of political economy clarify the transition to socialism or
how historical materialism generally contributes to this clarifica-
tion.

1 WHAT IS HISTORICAL MATERIALISM?

In my view what is most fundamental to answering this question


is the clarification of the relation between political economy and
historical materialism. It is especially important to understand
that historical materialism is an approach and not a science. It is
very common, if not orthodox, to claim that historical material-
ism is the science of history, but if we take this claim seriously, it is
likely to lead us down the path of economism or theoreticism.
In Stalin's view historical materialism is the science of history
which sets forth the laws of development of society similarly to
the way biology does for living things. 2 Like many other
interpreters, Stalin seems to derive his laws of development
primarily from Marx's 1858 Preface to A Contribution to the
Critique of Political Economy. But this is a very condensed and
abbreviated statement, the meaning and scientific status of which
is unclear. What precisely are the forces and relations of
production, how do they interrelate and to what extent can we
explain history by this interrelation? Stalin puts forward the
economistic position that this relation is the key to understanding
history. The basic law of social development is the contradiction
between forces and relations of production. Forces of production
give rise to relations of production which at first foster the
development of those forces. But when the forces pass a certain
level of development the relations become a fetter on any further
development of the forces. Eventually this produces a revolution-
ary situation where finally the fetters are burst asunder and a new
mode of production is established. The economistic shortcomings
of this law of historical development have been sufficiently
commented upon by others for me to abstain from further
critique. 3
Althusser also sees historical materialism as the science of
228 Historical Materialism

history, but he attempts to overcome Stalin's economistic


emphasis on forces and relations of production by defining mode
of production as a complex articulation of the economic, political
and ideological. But since 'mode of production' is still the central
concept of a science, Althusser is prone to commit theoreticist
errors. 4 In other words, in his effort to tum the study of history
into a scientific theory, theory is made to perform tasks that it
cannot, and the actual study of concrete history is slighted. Later
I shall argue that although the concept of 'mode of production'
does have a role to play in historical materialism, it does not play
the role of being the central explanatory concept of a scientific
theory.
It is extremely important to emphasize that historical material-
ism is an approach guided by a science and is not itself a science.
Even the study of capitalist history which falls within the science
of political economy is only guided by more abstract levels of
theory. Theory acts as a guide to historical research, but I
emphasize the independent importance of concrete historical
research. There is no general theory of capitalist history, and we
cannot collapse theory and history together into a unified
theoretical history. If there is no theoretical history within the
science of political economy, there are even less grounds for such
history with pre- and post-capitalist modes of production. Here
theory still acts as a guide, but it is one step further removed than
in the case of capitalist history. How then does political economy
and especially the theory of a purely capitalist society act as a
guide to the study of pre- and post-capitalist modes of produc-
tion?
The theory of a purely capitalist society theorizes the most
complex, developed and advanced economic society. With pre-
capitalist societies the economic does not emerge as a separate
realm or as a dominant realm. It is only when the labour and
production process comes to be governed by the self-regulating
market that the economic becomes clearly differentiated from the
political and ideological. With a purely capitalist society the
economic not only becomes purified of the non-economic and the
contingent, but also it comes to dominate society since, as passive
reflexes, the political and ideological play no role in actively
governing society.
The fact that it is possible to have a purely economic society but
not a purely political or ideological society suggests that the
Some Basic Concepts 229

economic is more basic. This is also supported by common sense


since it is necessary to eat before philosophizing or politicizing. It
follows that the way a society is organized to produce and
reproduce its material life is likely to explain a lot about that
society and in some sense be basic to understanding it. With pure
capitalism the production and reproduction of material life is
entirely economic in the sense that the norms of material life
which exist in all societies operate according to purely economic
principles only in a purely capitalist society. 5 All societies have a
labour and production process, but it is only with pure capitalism
that this process can be operated without political and ideological
supports. There are general norms of material life which operate
in all societies, but we only understand their full economic
significance in the theory of a purely capitalist society. This
theory brings to light the general norms of economic life common
to all societies by showing their particular realization in the most
fully developed economic society, pure capitalism. What are some
of these norms and how does pure theory bring them out?
All societies, in order to be viable, must find some stable way to
combine available labour-power, technology and natural resour-
ces to meet basic social needs. All societies do this by a mode of
dividing labour and the product oflabour. Viability also requires
that direct producers are guaranteed at least subsistence. Where
society produces in excess of subsistence, it is possible for a class
structure to develop in which a dominant class appropriates the
surplus. An excess over subsistence is also a necessary condition
for technological advance, since technological innovations in-
volve a deduction from present consumption for the sake of
improved productivity in the future. These are a few ofthe general
principles or norms of economic life that in pure theory are
converted by commodity-economic logic into laws of motion of
capitalism. Now these norms cannot form the basis of a
transhistorical science of economics. In fact they can only be
understood as purely economic norms in pure theory where they
operate commodity-economically. In pre-capitalist modes of
production, they are often operated according to an undifferen-
tiated amalgam of economic, political and ideological forces. The
pure economic operation of these norms in pure capitalism can
help to guide our historical materialist studies where they are
always impure.
It follows from what I have been arguing that there is no
230 Historical Materialism

independent science of history, but instead historical materialism


is an approach to the study of history guided by general principles
which are clarified by pure theory. The law of value applies to the
capitalist mode of production and not to pre-capitalist modes,
but at the same time as it theorizes the necessary inner connec-
tions of pure capitalism, it reveals general principles common to
the reproduction of material life in all societies. It also clearly
differentiates the economic from the political and the ideological,
so that the economic can be used as an analytic category in
connection with modes of production where it is not clearly
differentiated by the operation of the mode itself. Finally it is
important to clarify the guiding principles of historical material-
ism in reference to the objectively grounded law of value and not
from other texts such as The German Ideology or the 1858 Preface.
The theory of a purely capitalist society provides an objective
ground for the principles of historical materialism, whereas, when
supported by other texts, such principles must remain asertions
that, however much they are supported by argumentation, will
lack the objective support and clarifying precision of the dialectic
of capital. In the following four sections I shall look at some of the
basic concepts of historical materialism, and show the difference
that the Uno/Sekine approach makes in their interpretation. In
particular I shall emphasize the differences that flow from
viewing these concepts not as central explanatory concepts of a
science, but as guiding principles or sets of principles for a
tradition of historical research.

2 MODE OF PRODUCTION

In recent years there has been so much debate over this key
concept, that there is now a body of literature referred to as 'the
mode of production debate'.6 In my view, much of this debate
would not have occurred had Western Marxists had the benefit of
an exposure to the approach being outlined here. In fact the
debate stems primarily from the Althusserian problematic with
its emphasis on a science of history.
Althusser attempts to establish the objectivity of historical
materialism by claiming that history is a 'process without a
subject'. Althusser's approach completely absorbs the subject
into structures, so that it has often been called 'structuralist'. It is
defensible to place a strong emphasis on the need to theorize
Some Basic Concepts 231

structures in historical studies, but surely the universal suppres-


sion of subjectivity is going too far. The result will not be
Althusser's goal of objective knowledge, but instead an overly
abstract and mechanistic history. As I have previously argued, it
is only with the· total reification of pure capitalism that we get
social processes where the subject is neutralized.
Unlike Uno and Sekine, Althusser and especially Balibar do
not find the objective grounding of the concepts of historical
materialism in the law of value; instead their impulse is to create a
transhistorical conception of 'mode of production' consisting of a
small number of elements which recombine in various permuta-
tions and combinations to constitute various modes of produc-
tion. 7 'Mode of production' becomes the key concept of the
science of historical materialism, but this concept is itself an
analytic construct without an objective grounding.
With the Althusserian approach 'mode of production' is made
to carry more explanatory weight than it can possibly bear. Is a
mode of production a particular articulation of relatively auton-
omous economic, political and ideological practices? Is it instead
defined by a particular articulation of forces and relations of
production which of course must themselves be defined? Or
perhaps we should define 'mode of production' by class structure?
Finally if we want to be really synthetic, we could perhaps
combine all three of these approaches in a subtle, multidimen-
sional, overdetermined, interarticulated whole! These debates
show that it is crucial for this key concept, which defines the
theoretical object, to have a clear and precise meaning. But, since
the concept is not grounded in the dialectic of capital, there is no
objective basis for clarifying it.
Even if a clear definition of 'mode of production' could be
established, the problem of how to relate this 'abstract-formal'
theoretical object to concrete history remains. The Althusserians
approach this problem by pairing 'mode of production' with
'social formation'. According to Poulantzas, the real concrete is a
collection of social formations articulated with one another, and
each social formation is an articulation of several modes of
production unified by a dominant one. But the Althusserians
have never achieved a clear articulation of several modes of
production within a social formation or several social formations
with each other.
Foster-Carter argues that the emphasis on 'mode of produc-
tion' has sometimes created economism and formalism. These
232 Historical Materialism

tendencies can be superseded, according to Foster-Carter, by


substituting the notion of a 'mode of reproduction'. 8 According
to Foster-Carter, if we think about the reproduction of the social
totality, we will avoid the one-sided emphasis on the economic
implied by 'mode of production'. Moreover, if we think about the
reproduction of the concrete social totality, we avoid the formal-
ism and theoreticism of the split between the abstract-formal
mode of production and the concrete social formation. The
problem with Foster-Carter's approach is that it falls back into
the logical-historical method which makes it difficult to distin-
guish the difference between the expanded reproduction of a
purely capitalist society and the reproduction of Nazism in
Germany in 1938. It is an approach which sounds appealing
because it tries to integrate everything into one reproducing
totality. The appeal cannot be followed by a very impressive
performance since in trying to explain everything very little is
explained. A great deal could be said about the uses and abuses of
the concept 'reproduction', but I shall avoid the temptation of
pursuing this point further, since these critical remarks are merely
a preface to my analysis.
Another consequence of the modes of production debate has
been a tendency to fetishize 'the boundary-problem', that is, the
problem of defining precise boundaries separating one mode of
production from another. For example, what is the precise
difference between feudalism, petty commodity production,
capitalism and socialism? Are there more modes of production
such as a 'neocolonial mode of production'? If each mode is a
particular articulation of the economic, political and ideological,
then how precisely do we define each one? Having defined each
one separately what happens when their boundaries intermesh or
interface as they do when articulated together in particular social
formations? This can become especially complicated in instances
like the transition from feudalism to capitalism, where several
modes of production may interpenetrate. The way to sort out
such a debate is not to insist that modes of production be
constructed like rigid boxes with precise boundaries, but instead
to use the clear picture of capitalism provided by pure theory and
the image of mercantilism provided by stage theory to establish
which historical changes are most crucial to the development of
capitalism.
In my view the only clear and precise use of 'mode of
production' is when referring to a purely capitalist society. In this
Some Basic Concepts 233

one case, society really is a mode of production in the fullest sense.


The economic is self-contained and dominant, subsuming all of
social life. When 'mode of production' is used as a concept of
historical materialism to refer to different historical periods, it
should be used on analogy with this one clear and precise case.
The concept 'mode of production' is not so much a scientific
concept as a package of research maxims. To refer to feudalism as
a 'mode of production' signals to the reader that a materialist
approach is being adopted, and that feudalism is going to be
examined as a way of organizing the reproduction of material life.
Using 'mode of production' should imply that the study of history
is going to be guided by the general materialist principles
supported by the science of political economy and especially by
pure theory.
'Mode of production' is more a classificatory concept than an
explanatory concept. It is used to differentiate different types of
economies existing in different historical epochs. For this pur-
pose, it is useful to arrive at criteria of differentiation. Generally,
three basic definitions have been used. First, a mode of produc-
tion is defined as a particular articulation of the economic, the
political and the ideological. Second, it is defined as an articula-
tion of a particular set of forces and relations of production.
Third, modes of production are differentiated according to
differences in class structure. It seems to me that a mode of
production can and should be looked at in all these ways, but the
most useful general criterion and the one Marx himself most
frequently used is class structure. Ifwe think for a moment about
what differentiates slavery, feudalism, capitalism and socialism
most clearly and simply it is class structure. Class structure, as a
mode of appropriating the surplus, is simpler and clearer than the
other criteria. The distinction between forces and relations of
production is not so clear. The distinction between slavery and
feudalism for example has not usually been specified in these
terms. Articulation of the economic, political and ideological is
far too complicated in general to serve as a criterion of
classification. The definition that seems most in keeping with
common usage and is simplest and clearest is that a mode of
production is a world-historic type of surplus appropriation.
Where there is no class structure as in many tribal economies or as
in socialism, forces and relations of production may be used to
identify modes of production.
The distinction that the Althusserians make between mode of
234 Historical Materialism

production and social formation tends to break down when


analysing pre-capitalist modes of production. Feudalism has no
tendency to purify itself towards economic laws of motion of
feudalism. So in specifying the feudal mode of production, we are
essentially abstracting and generalizing from history with the
guidance of the principles of historical materialism. When we
look at the history of feudalism, we see that it takes many forms,
and though we may abstract from these forms in order to arrive at
a more general type, feudalism itself has no tendency to do this.
Unlike capitalism which is self-abstracting, with feudalism it is we
who do the abstracting though guided by principles derived from
the theory of a purely capitalist society. It is possible to argue as
Anderson does that one form of feudalism is the purest and most
classical form, but this is not because feudalism itself has a
tendency to create this form; it is instead because of a judgment that
feudalism is a synthesis of slave and barbarian modes of
production. 9 Then the classical form is the one that most clearly
synthesizes the slave and barbarian modes in a balanced way.
'Mode of production' is not a hardened scientific concept. It is
simply used for purposes of classification within a materialist
approach to history. The concept should be used in a way that
improves our understanding of history . At more concrete levels of
analysis there is no definite limit to the types of modes of
production or to their number. Feudalism may, for example, be
seen as a collection of modes of production which have a 'family
resemblance' while not having any dominant feature in common.
My proposal that modes be differentiated according to class
structure refers only to the classical world-historic types. These
major types are insufficient to understand the diversity that exists
when we look at history more concretely. Modes of production
should not be rigid boxes stultifying the study of history, rather
they should be conceptualized by using materialist principles to
aid historical research.

3 FORCES AND RELATIONS OF PRODUCTION

Basing their ideas on Marx's 1858 Preface, some Marxists have


argued that the relation between forces and relations of produc-
tion is fundamental to historical materialism. The forces of
production give rise to a particular set of relations of production
Some Basic Concepts 235

which in tum foster the further development of the forces of


production until the relations of production become a fetter and
are finally burst asunder. One of the problems with this emphasis
is that the range of debate over even the meaning of 'forces and
relations of production' would suggest that these are inherently
vague concepts. When we move beyond the problem of meaning,
the debate becomes even more pronounced with some arguing for
the primacy of the forces of production and some for the primacy
of the relations of production. Part of the confusion has to do
with how class structure relates to forces and relations of
production. Perhaps we can resolve some of these debates and
confusions by referring to the theory of a purely capitalist society.
Marx does not use these two terms consistently and never
engages in any systematic explication of them. Although these
two concepts are not explicitly used in the dialectic of capital, they
are implicit and hence can be clarified in reference to it. tO The
relevant point of reference is crisis theory with its alternating
widening and deepening phases of capital accumulation. During
the widening phase, capital accumulates on the basis of a more or
less fixed organization of productive technology or 'productive
forces'. Corresponding to the productive forces is a particular
value relation between capital and labour which we may refer to
as 'relations of production'. As the productive forces expand they
dry up the reservoir of surplus population resulting in increased
wages. But this threatens not only to de-commodify labour-
power but to undermine the rate of profit. When the rate of profit
is undermined, capital tends to disappear and to be converted into
money. In short the capital-labour production relation is burst
asunder and capital is faced with the threat of imminent demise.
The resolution of the crisis requires the reorganization of
productive forces on a more productive basis coupled with a
renewed capital-labour production relation which will allow
renewed accumulation.
This example demonstrates that the classical and orthodox
interpretation of the relation between forces and relations of
production holds in a purely capitalist society. By the same token,
in societies that are not totally reified and commodified, we may
question the explanatory power of these two concepts, and that is
because the automatism resulting from reification is dissolved
into politics, ideology and class power. Once this occurs it even
becomes difficult to distinguish clearly between forces and
236 Historical Materialism

relations of production. 'Forces of production' may be given a


strict technological definition, but then the concept is separated
from the concept 'productivity' because the same complement of
tools can produce very different levels of productivity depending
upon how the users of the tools are organized and motivated. If
that is the case, relations of production directly enter into the level
of productivity. The choice seems to be between crude tech-
nological determinism or breaking down the distinction between
the two concepts.
On the other hand, it is no doubt useful to consider the
structural limitations associated with forms of technology and
levels of productivity. Thus although I disagree with Cohen's
general interpretation of forces and relations of production, I
agree with his conclusion that capitalism is only consistent with a
certain range of productivity and forms of technological organ-
ization. This is primarily because of the special requirements
needed for the commodification of labour-power. The com-
modification of labour-power is inconsistent with situations
where productivity is low, where most production is agrarian,
where the labour and production process is relatively rigid or
where most labour is skilled. These are precapitalist conditions of
production, but there are also post-capitalist forces of production
which are incompatible with the continued commodification of
labour-power. This is where automation replaces workers, or
where services come to replace commodity production as the
dominant economic activity, or where labour becomes skilled, or
where the types of use-values that are prevalent are highly
complex and social or are one-of-a-kind complex systems like
communications systems. It follows that capitalist market rela-
tions of production are only suitable for a certain range of
development of productivity. It should be clear that at levels of
productivity that are too low or are too high, it is not possible to
maintain the commodification of labour-power.
It is apparent that something like the relation that Marx
outlined in the 1858 Preface exists in a purely capitalist society
where the forces of production are a particular technical organ-
ization of capital and the relations of production refer to the
capital-labour value relation. This tight fit occurs because in a
purely economic society the motion of value subsumes all use-
value production to the operation of the commodity-economic
principle. In non-capitalist modes of production this relationship
Some Basic Concepts 237

would not necessarily hold and the relations of production would


necessarily include politics since in the absence of market
regulation some sort of political/ideological regulation is essen-
tial. Furthermore, at low levels of productivity where the division
of labour is simple, the productive forces do not require any
particular set of production relations except that a society
without a surplus may not have a class structure. However, once
there is an agrarian society with a surplus, any number of
variations in relations of production may accompany such forces
of production. Generally the relations of production will involve
a class structure, but not necessarily. Thus besides the diverse
relations of production associated with primitive communism,
various class forms of relation of production including slavery,
feudalism and various types of tribute modes are all consistent
with agrarian societies with low productivity but some surplus. It
follows that in so far as the relations of production control and
coordinate the forces of production, the relations of production,
outside of pure capitalism, will always include class domination
where it exists and will always include superstructural elements.
The relation between forces and relations of production is only
purely economic in a purely capitalist society. Otherwise it is a
rather vague distinction with the relations of production includ-
ing all manner of superstructural elements and not necessarily
being very distinct from forces of production. Although the
distinction may be given precise meaning and be made useful in
the study of some concrete piece of history, we cannot in general
understand the movement from one mode of production to
another as the forces of production bursting asunder the relations
of production, with the possible exception of the transition from
capitalism to socialism (even in this case it would seem rather
crude and determinist). When we look at slavery and feudalism, it
is not at all clear what constitutes the forces and relations of
production. Of course, it is always possible in retrospect to define
them in such a way that they are functional for each other and
then at some point become dysfunctional, but this is not likely to
add much to our understanding of historical change. In fact
depending upon what we mean by 'forces and relations of
production' it is entirely possible for the relations of production
to 'burst asunder' the forces of production. 11
The inescapable conclusion is that there is no general historical
law that can be formulated as a relation between forces and
238 Historical Materialism

relations of production. The distinction may be useful in shedding


light on a mode of production, when its meaning is specified in
relation to the dialectic of capital. This is because it is only with
pure capitalism that the distinction has a determinant and purely
economic meaning. Heretofore this distinction has often been
used as a mechanistic gloss on history with scientific pretensions
rather than as a concept that really helps to explain historical
events. It does not contribute much to our understanding of the
transition from feudalism to capitalism to claim that the develop-
ment of feudal forces of production past a certain point bursts
asunder feudal relations of production forcing them to be
replaced by capitalist relations of production.

4 BASE AND SUPERSTRUCTURE

In recent years the base/superstructure distinction has been one of


the most maligned and rejected concepts of historical material-
ism. 12 This is because of the very strong reaction against
economism and reductionism. Nevertheless, despite all the
reaction against it, the base/superstructure distinction, properly
understood, is of fundamental importance to historical material-
ism.
In Chapter 6 I argued that the base/superstructure metaphor
only holds at the level of pure theory. At this level the political and
ideological are passive reflexes of the economic base. The fact that
this metaphor only strictly holds at the level of pure theory does
not leave us in a pluralistic and agnostic position with respect to
other levels and non-capitalist modes of production. The eco-
nomic, political and ideological are not simply three variables
which may stand in any relation to each other. For example, in no
mode of production would the ideological be the substructure
and the economic the superstructure. Pure capitalism demon-
strates that the reproduction of society's material life can be
managed purely economically, and that this is the tendency in the
most advanced organization of material life. The theory of a
purely capitalist society demonstrates that there are general
norms of economic life common to all societies, and that the
reproduction of material life must always be understood first and
foremost in economic terms. This does not mean, however, that
the political and ideological are always passive reflexes. In
Some Basic Concepts 239

historical materialist explanation the economic will always be


basic in grasping the general features of a mode of production,
but in many cases the economic is only analytically separable
from the political and ideological. The political and ideological
may play an active role in the very constitution of the economic.
Furthermore, they may playa dominant role in the explanation
of particular historical events as opposed to the characterization
of world-historic modes of production where they must always be
secondary.
The base/superstructure metaphor has been rejected because it
has been abused by being used too literally and too universally. I
have argued that the metaphor is literally accurate only in the case
of pure capitalism. Beyond this it can serve as a rough approxima-
tion in guiding the study of pre- and post-capitalist societies. This
metaphor is important because it underscores the fact that we do
have a rigorous theory of the economic base of capitalism (the law
of value), and that this theory can serve as an important source of
guidelines when studying the reproduction of material life in
other modes of production. In a sense the economic is the base in
all modes of production, as long as we understand by this that it is
more basic than the state and ideology and not that the latter two
are passive reflexes. With this interpretation, the concepts of base
and superstructure are central and crucial to historical material-
ism. Pure theory or the theory of the capitalist base, gives us a
clear and precise comprehension of the economic, and without
this we cannot clearly grasp modes of production where the
economic can only be analytically separated from the political
and ideological. Historical materialism assumes that what is
fundamental to the understanding of any society is its material
viability and reproduction of this viability. When we speak of
material reproduction this must always centrally involve the
economic even if it is mixed with non-economic elements. The
base/superstructure metaphor is important because it expresses
this basic perspective of historical materialism.

5 CLASS ANTAGONISM

While the base/superstructure principle has been attacked in


recent years, the principle of class antagonism has often been too
uncritically embraced. Sometimes the principle of class struggle
240 Historical Materialism

has been so elevated that it is fetishized. In these cases the primacy


of class struggle becomes the central if not the single principle of
historical materialism. Historical materialism, then, is simply an
approach which understands history in class struggle terms. Now
it is no doubt true that class struggle plays an important role in
explaining many major historical changes, but it is also clear that
it cannot explain everything. Furthermore, if 'class' is to bear all
the weight of historical explanation, it becomes crucial that this
concept have a clear and precise meaning that is objectively
grounded.
'Class' is a term that has many meanings, but generally it refers
to some kind of social stratification. Is a struggle between
landlords and tenants over the rent paid for apartments a class
struggle? Is the struggle between merchants and consumers over
the price of meat a class struggle? Is a struggle between creditors
and debtors over the rate of interest a class struggle? The meaning
of 'class' may be stretched in various ways for various purposes,
but historical materialism will be more coherent if there is a stable
and core meaning to the concept that can serve as a reference-
point. It is my contention that this core meaning can be
objectively grounded in the dialectic of capital.
The theory of a purely capitalist society presents a purely
economic and objectively grounded conception of class. It shows
that a class society can operate purely economically without any
reliance upon extra-economic force. Because they are purely
economic, the concepts of 'capital' and 'labour' are clear and
precise conceptions of class. Capital owns and operates the means
of production and labour sells its labour-power to capital in
return for a living wage. Besides reproducing the value of its own
labour-power, labour produces a surplus value which is
appropriated by capital. The dialectic of capital demonstrates
that the dynamic between capital and labour is central to
capitalism, and that one class creates all the surplus and the other
appropriates it. It is clear that surplus appropriation is basic to
defining class and class structure.
The major world-historic modes of production are most
frequently classified accordin y to differences in surplus
appropriation or class structure. I Each mode of production has a
dominant type of surplus accumulation, though it may also have
several sub-types. In non-capitalist modes of production, classes
are never purely economic since politics must be involved in any
Some Basic Concepts 241

economy that is not completely self-regulating. But class should


still be identified according to criteria based on the paradigm
case, the pure classes of capitalism, capital and labour. As long as
there is this clear and precise core of meaning, it is possible
consciously to move away from it without producing confusion.
It is not necessary always to use 'class' in a strict and rigid way.
Within the capitalist mode of production, the struggle between
creditors and debtors may, for example, be called a 'class struggle'
as long as we are clear about how it relates to the dominant
capital/labour struggle and to the distribution or redistribution of
surplus value. Besides classes, in the strict sense of the term, there
may be other class-like or quasi-class formations that play an
important role in history. In order to explain some phenomena,
the most important division of labour will be the class division,
but in others the division of labour based on gender or race may
be more important. We are not likely to arrive at a good grasp of
history if we cling to an overly rigid conception of 'class' that
ignores the importance of other social groupings.
As with the other concepts of historical materialism, 'class' and
'class struggle' are general principles to guide historical research.
As concepts they receive their objective grounding in the theory of
a purely capitalist society, and this gives them a core of
determinant and stable meaning. This core meaning then serves
as a reference-point as the concepts of pure theory are converted
into principles which serve to guide a materialist approach to
historical research.

6 CONCLUSIONS

In this chapter I have argued that historical materialism is not the


science of history, and that, indeed, there is no science of history.
There is, however, a science of political economy grounded in the
law of value as articulated in pure theory. The dialectic of capital
generates an interpretation of dialectical materialism, which
demonstrates that there is no dialectic of history that can serve to
ground the theory of history as an independent science. Historical
materialism is simply a general approach to the study othistory,
superior to other approaches because it is guided by the objective
dialectic of capital. By clearly and precisely theorizing the most
advanced economic society, the dialectic of capital serves to
242 Historical Materialism

ground and clarify orienting concepts and guiding principles for a


materialist approach to historical research.
Some of the traditional concepts of historical materialism have
been dogmatized because they have been treated as though they
were central explanatory concepts of a scientific theory. We
cannot create a successful approach to the understanding of
history by extracting some concepts from a number of Marx's
texts like the 1858 Preface. Our reference-point must be pure
theory; and what we generate is not a science of history but some
guidelines for a materialist approach. In this chapter I have tried
to indicate a few of guidelines that can be generated by some of
their uses and the limitations on this use. I have done this mostly
by reconsidering some traditional concepts.
The most fundamental contribution of pure theory to historical
materialism is a precise concept of the economic and of the
general economic principles common to all societies. This
establishes a basic framework for understanding the importance
of a society's material life and how to conceptualize its reproduc-
tion. The concept 'mode of production' cannot be successfully
made into a hardened scientific concept capable of explaining all
modes of production in terms of the variations of a few central
variables. 'Mode of production' only has a clear and precise
meaning with the theory of a purely capitalist society because it is
the only case where the economic is self-contained and self-
determining. Outside of this instance, 'mode of production' is a
classificatory concept and a sort of package of research norms
indicating that a materialist approach is being used. 'Base and
superstructure' have roughly the same logical status as 'mode of
production'. They are only literally accurate at the level of pure
theory, but they serve as an important guideline to a study of
history that places primary emphasis on the economic. Though
the contrast between forces and relations of production can also
be grounded in pure theory, this pair of concepts requires the
most caution and has perhaps been the most abused of the
traditional concepts of historical materialism. Even more than
'mode of production' this pair cannot serve as adequate central
explanatory concepts of a science of history.
Finally nearly all Marxists would agree that 'class structure'
and 'class antagonism' are concepts of fundamental importance
to historical materialism. The disputes over the meaning of these
concepts are best settled in reference to pure theory. Having done
Some Basic Concepts 243

this, I note that the only pure classes are capital and labour in a
purely capitalist society, and that at a historical level class
phenomena are often somewhat muddled. Thus though we have a
precise conception of class, it is not necessary that we insist on its
strict usage in all cases as long as we are fully aware of what we are
doing. Often it will be fruitful to look at the social division of
labour as a whole in order to avoid 'class reductionism'.
I close with this paradoxical observation. Historical material-
ism will become more scientific as fewer Marxists try to tum it
into a science of history.
10 Transition to Socialism
A principle concern of historical materialism has always been the
transition to socialism. In this chapter I want to argue that the
demise of capitalism does not automatically lead to socialism and
that socialism is only one of the possible post-capitalist forma-
tions. Since socialism is not produced by any sort of objective
laws, the subjective factor becomes crucial. In other words, the
achievement of socialism depends very much on what men and
women do around the world, which in tum depends to some
extent on what they understand by 'capitalism' and 'socialism'. A
clear grasp of 'capitalism' and 'socialism' will expedite the
strategic thinking of how to move from one to the other. In this
chapter I want to argue for the importance of grounding our
strategic thinking in the dialectic of capital because it presents a
clear and precise conception of 'capital', and because such a
conception is the basis for gaining clarity on the 'negation' of
capital or socialism.
Like every other chapter in this book, my concern in this one is
not to present a completed theory of the transition to socialism,
but instead to set forth some considerations which can guide the
construction of such a theory. The starting-point must be some
exploration of the basic principles of socialism, what these
principles are and how to derive them. Second, in order to move
from the present towards socialism, clarity about the current
conjuncture is essential. In order to begin this task, I shall briefly
discuss some of the features of our present global situation, and
while doing this I shall also indicate the importance of the
political and ideological dimensions and the inapplicability of the
law of value. Third, well-worked out transformative strategy
requires careful study of previous efforts to bring about socialism.
Learning the lessons of past history is crucial in avoiding the
repetition of errors and in learning from experience what works
best. Although I shall not undertake this task in this book, it is not
because I do not think it is important. On the contrary, it is too
244
Transition to Socialism 245

important and too big a task to fit into this book. In summation,
then, an effective transformative strategy must combine clarity on
the fundamental principles of socialism, clarity on the current
conjuncture and clarity on the lessons to be learned from the past.
In this chapter I shall focus on the basic principles of socialism
and shall touch upon theorizing the current conjuncture.
However, there are other considerations when reflecting upon
mainstream Marxist thinking about the transition to socialism.
The Uno School's radical break with the logical-historical
method has important implications for the relation between
theory and practice. I shall analyse some of these implications in
this chapter. Let me proceed, then, with the most basic question:
what is socialism?

WHAT IS SOCIALISM?

Is socialism primarily a utopia to be filled out by our subjective


wishes and hopes? Marx and Engels avoided drawing up utopian
blueprints and rejected the idea that socialism is utopia; instead
they wrote of socialism in terms of basic principles. They argued
that socialism is a realistic possibility because capitalism creates
both the material preconditions and the human agency to bring it
about. Their principles were not the product of their imagina-
tions, but were seen to represent the positive or progressive
'negation' of capitalism (i.e. the supersession of capitalism).
Socialism preserves the social productivity achieved by capitalism
while advancing the possibilities of a much fuller realization of
the human potential.
If the basic principles of socialism are derived from the
negation of capitalism, then they cannot be more determinant
than the concept of capitalism. Depending upon what are seen to
be the central features of capitalism, different principles of
socialism will be emphasized. Some of the features that are
typically emphasized include: the end of alienation, the end of
exploitation, the end of oppression, the end of the repressive state,
the end of the division oflabour, the end ofreification, the end of
economic insecurity and crisis, the end of placing profits before
people. Or viewed positively a socialist society is: planned,
democratic, humanistic, internationalist, egalitarian, free,
affluent, just and communitarian. In general a thinker's concep-
246 Historical Materialism

tion of socialism if related to his or her conception of capitalism


and is no more clear and precise than the latter.
The theory of a purely capitalist society presents a clear and
determinant conception of capitalism. The negation (superses-
sion) of a purely capitalist society should therefore yield clear and
determinant principles of socialism. In all pre-capitalist modes of
production extra-economic force enters into the reproduction of
material life. The total reification of pure capitalism makes it
possible for material life to be reproduced without any interven-
tion of extra-economic force. In the case of pure capitalism
socioeconomic life is governed entirely by the self-regulating
market. Because pure capitalism does not rely upon extra-
economic force, it represents an advance over pre-capitalist
modes of production. In order for socialism to represent an
advance over capitalism, it must not revert to reliance upon extra-
economic force.
The control over socioeconomic life which with capitalism is
vested in the market must be re-appropriated by society. But the
only way for society to reassert control over its economic life
without reliance on extra-economic force is for that control to be
thoroughly democratized. The commodity-economic principle or
the market principle must be replaced by the human principle
(production for profit replaced by production for human need).
Human beings must be treated as ends and not means, and the
fullest realization of each human being become society'S goal. But
a direct corollary of this principle of humanism is the principle of
democracy, since it is the only alternative to force, coercion and
manipulation. The two basic principles of socialism are therefore
humanism and democracy. These are the two principles that
follow necessarily and most directly from the positive or progres-
sive de-reification of capitalism. Instead of being market-gover-
ned, economic life is governed by humanity for humanity. This
necessitates democracy, not in the legalistic and formalistic sense
of bourgeois democracy, but in the sense of the democratization
of all social institutions. Further principles such as freedom,
equality, community and distributive justice may be derived from
the two basic ones.
Using these two principles as a guide, it is possible to think
through the kinds of changes necessary to bring about socialism.
For example, it is often asked, what will induce people to work in
a socialist society where there is no reliance on the whip of
Transition to Socialism 247

economic insecurity or on extra-economic force. I agree with the


cogent answer given by Marx: 'work becomes life's prime want'.
In order for work to become an avenue of self-fulfilment rather
than of self-negation many changes have to occur in society. It is
the task of a socialist movement or party to think through these
changes concretely.
The basic principles of socialism can be further clarified and
elaborated, but it is important to fix these two basic principles as a
basis for mobilizing people, for thinking through transformative
strategies and for evaluating the success of past and present
efforts to bring about socialism. These two principles may never
be completely realized in any historical society. It is hard to
imagine a completely democratic and completely humanistic
society; and yet it is these principles that should be the stars that
orient us. Societies that call themselves 'socialist' should be
evaluated according to how seriously they strive to realize these
two principles. Even in this early period of the world-historic
phase of transition away from capitalism, the primitive socialist
regimes that exist should not be called 'socialist' unless they show
signs of moving in the direction of democracy and humanism.
There are basically two kinds of post-capitalist societies: those
that rely heavily on top-down coercion and manipulation and
those that do not. The first kind I shall refer to as 'statist' and the
second as 'socialist>. This is a very important distinction to make
because many states that call themselves 'socialist' are in fact
statist. All existing socialist states are defective when it comes to
democracy, but if they even show some signs of moving in the
direction of democracy and of being concerned about increasing
democracy, they may be considered as at least 'primitive' socialist
societies. As E. O. Wright has suggested, there may also be
various types of statist and socialist societies as well as hybrids. I
Socialism is only one possible future and is only more likely than
other futures to the extent that human beings often bring about
that which is both possible and desirable.
Previously I discussed the subsumption of the general norms of
economic life to the laws of motion of capitalism in a purely
capitalist society. According to Shumei Ohuchi, one way of
further clarifying and expanding on the principles of democracy
and humanism is to consider carefully how the general norms can
be freed in a progressive sense from the reified laws of capitalism. 2
To do this we need to think through what is implied by the
248 Historical Materialism

democratization of economic laws successively in the Doctrines


of Circulation, Production and Distribution. Thus, for example,
the Doctrine of Circulation might yield a conception of the
consumer's sovereignty (of course not in the formalistic sense of
bourgeois economic theory), the Doctrine of Production could
generate conceptions of workers' control and the Doctrine of
Distribution can generate notions of social control over profit,
rent and interest. We need to pose such questions as, how can
democratic institutions in a socialist society play the fine-tuning
role of the rate of interest in a purely capitalist society? In short
there is a need to think in concrete and institutional terms about
how to preserve the gains of capitalist society while reappropriat-
ing democratic control over our socioeconomic life.
In Chapter 6 I discussed the fictitious commodities, money,
labour-power and land, arguing that they pose severe problems to
capitalistic commodity-economic management. In the transition
to socialism, it is useful to consider how these fictitious com-
modities can be de-reified so that commodity-economic regula-
tion can be replaced by regulation through democratic institu-
tions and democratic and humanistic ethics. Since the com-
modification of labour-power is the key to capitalism, its de-
commodification through the initiative of labour-power itself
must be seen as the leading edge of socialism. This implies ethical
humanism where workers are no longer treated as means but as
ends in themselves. Humanism must also oppose war and all
forms of discrimination and oppression. As already suggested the
commodification of money needs to be replaced by real consumer
sovereignty or democracy. Finally the commodification of land
should be replaced by principles that regulate our relation with
nature in a harmonious fashion (i.e. according to ecologically
sound principles). If the de-reification of capitalism involves the
above aspects, then the movement for democratic socialism
would involve a confluence of the workers' movement, the peace
movement, the women's movement, the ecology movement and
all other movements which oppose oppression. It is extremely
important for such a general movement to begin to formulate
concrete democratic alternatives and an ethical theory based on
humanism.
Let me summarize the argument so far. The basic principles of
socialism are not the product of subjective imagination, but are
objectively grounded in the dialectic of capital. They are arrived
Transition to Socialism 249

at by considering what is necessary in order to de-reify capitalism


without resorting to extra-economic force. The two essential
principles so derived are humanism and democracy. Humanism is
the basic social ethic and democracy is the basic organizational
principle of socialism.

2 THE CURRENT CONJUNCTURE

The basic principles of socialism are highly abstract. In order to


move most effectively from our current situation towards social-
ism, it will be helpful to have a good grasp of the principle
dynamics and contradictions of the current conjuncture. Such
knowledge can help inform strategies of change so that socialists
will deploy their energies most effectively. In this section I shall
neither present a complete theory of the current conjuncture nor
explore the strategic implications of such a theory. Instead, I shall
adopt the more modest goal of how to approach the analysis of
the current conjuncture, and I shall analyse some of its basic
features.
The most important question is, how do we characterize the
present dominant world economy? The answer to this question is
crucial because it determines how we use the law of value and
stage theory to understand our present situation. There are many
Marxists who have used some variation of the law of value or of
the theory of imperialism to theorize the post-World War II
period. I have argued, however, that this is a phase of transition,
and if! am correct about this, then it is not possible to construct a
stage theory for the phase after World War I. In a phase of
transition capitalist institutions persist, but they change their
character and new post-capitalist institutions begin to emerge. If
Marxists simply assume that full-blown capitalism still exists,
then they are likely to apply the laws of motion of capitalism
directly, and, as a result, fail to account for the novel, post-
capitalist features of our present situation.
I argued earlier that the world-historic phase oftransition away
from capitalism had its symbolic beginning in 1917. This does not
mean that capitalism suddenly ceased to exist in 1917, but instead
that from this point on the law of value was in retreat and hence
losing its hegemonic and self-regulating character. The effort to
resurrect finance-capital between the wars was a failure resulting
250 Historical Materialism

in fascism and war. The law of value no longer externalizes itself


into a coherent dominant type of capital accumulation. Capital
accumulation increasingly depends upon exogenous factors and
hence cannot be explained by the law of value.
During the phase of transition, capitalists still pursue profits,
workers are exploited and crises occur. But though it still exists
and apparently operates, the market begins to atrophy and loses
its self-regulating character. To the extent that the market ceases
to be self-regulating, the law of value can no longer be hegemonic.
The market may maintain its form while losing its capitalist
content. A new dynamic is estlished. The market becomes less
self-regulating, requiring more political and ideological supports,
but the more it depends on supports the less self-regulating it
becomes. The shrinking commodified sector depends more and
more on a politicized de-commodified sector. Although prices
still form in the market-place, they cannot be explained by the law
of value.
Let me expand a little on what I mean by de-commodification.
On the surface, it seems that more of the world economy is
commodified than ever before. While it is true that more use-
values are traded in the market than ever, not every use-value that
is traded is a capitalistic commodity. As I previously pointed out,
a capitalistic commodity is one that is capable of being supplied in
any quantitity in response to shifts in demand, and it is widely and
frequently traded in an impersonal market by large numbers of
buyers and sellers. A space-station or a battleship is not likely to
be a capitalistic commodity in the above sense. Where only one or
a few of a type of use-value is produced for an identifiable buyer
like the government, it cannot be a capitalistic commodity. Hence
most of these use-values are produced by contract on a cost-plus
basis. Value produces any use-value with indifference to any but
quantitative and impersonal market criteria. Where qualitative
and personal factors loom large, or where the use-value is too
large, complex or social, the motion of value has difficulty
operating. The motion of value has difficulty operating in these
regions even when capitalism is young and vital. It is only in a
purely capitalist society that the 'fictitious' commodities, labour,
land and money become completely commodified. After the stage
of imperialism, capitalism becomes increasingly ennervated; it
can no longer stand on its own two feet. The fictitious com-
modities are the first to escape its grasp as the market for land, the
Transition to Socialism 251

money-market and the labour-market lose their self-regulating


character.
The collapse of the gold standard after the stage of imperialism
undermines the commodification of money. Our current sytem of
managed currencies produces an artificial rate of interest. Accor-
ding to the law of value the price of land is equal to the rent
divided by the rate of interest. But this assumes a separation
betwe,en landed property and capital, and a rate of interest
formed in a competitive market. But according to Sekine, capital
and landed property become fused after the stage of imperialism,
so that rent is absorbed into the surplus profit offinance-capita1. 3
Furthermore, administered interest rates must give land an
artificial price, undermining the self-regulating character of the
land-market.
Essential to maintaining the commodification oflabour-power
is periodic crisis. But already with the stage of imperialism,
periodic crises become less tolerable as a means of renewing the
capital-labour production relation. World War I was the out-
come of efforts to avoid the problems of excess capital by
aggressive expansionism. The failure of finance-capital to re-
establish a self-regulating labour-market between the wars led to
the post-World War II system of powerful trade unions, managed
currencies and managed demand. The development of the trade
union movement is especially important in undermining the
commodification of labour-power. The post-World War II
system further atrophies the law of value and the market. In many
cases, political units come to be more important economic actors
than large firms. Crisis becomes even more intolerable so that a
system of indebtedness builds which prevents the bankruptcy of
large firms and large political units. The result of managed
demand, managed currencies and debt expansion is inflation.
When the state restricts credit to control inflation, the big
corporations cut back production, laying off workers. Instead of
using their money for accumulation, they now speculate in land
(further destroying the capitalistic rational price of land), earn
usurious interest rates or speculate in currencies (further
destabilizing the international monetary order).
Reagan and Thatcher believe that the solution to these
problems is to re-commodify the economy or in other words
return to the self-regulating market. In order to criticize these
policies effectively, socialists must be clear about why it is that the
252 Historical Materialism

market has necessarily declined and why this is an irreversible


process. If capital could always have its own way, as it does at the
level of pure theory, there would never be political intervention in
the economy. Political support is forced upon capital by the
intractability of use-values, and the further away from the ideal
use-values of pure capitalism that we move, the more capital
requires political supports. As the dominant type of use-value
production increasingly becomes for such things as space-
stations, and as commodity production in general shrinks relative
to the service sector, the forces of production can no longer be
operated successfully by pure capitalist relations of production.
Because they are contrary to the forces of production, policies to
re-commodify can only have at best a superficial and short-term
success. 'Free enterprise' is really not a viable alternative, and it
can only appear to be so because of massive ideological and
political supports. That some islands of the economy may seem to
work effectively according to the principles of free enterprise,
ignores the de-commodified sea which permits them to exist.
I have argued that the current conjuncture is a phase of
transition, and that this means that neither the law of value nor
stage theory is directly applicable. At the same time, we need to
theorize the present with reference to the law of value and stage
theory. This may seem like a subtle distinction. How, then, should
we use the law of value and stage theory to help theorize the phase
of transition?
By clarifying exactly what capitalism is, the theory of a purely
capitalist society helps to distinguish the capitalist from the non-
capitalist in the phase of transition. The basic value/use-value
contradiction of the dialectic of capital serves to orient our
analysis towards the use-value obstacles in the phase of transition
that undermine the law of value. Understanding how the
fictitious commodities, land, labour and money are commodified
in a purely capitalist society helps in the analysis of their de-
commodification in the phase of transition. Clarity on the
relation between the economic, political and ideological at the
level of pure theory is also useful in analysing the phase of
transition. Similarly, clarity on 'class' can help analyse class
phenomena in the present. Finally clarity about periodic crisis
gained in pure theory can help us to understand the current crisis.
By clearly presenting the dynamics of finance-capital, the
theory of imperalism can serve as a reference for understanding
Transition to Socialism 253

the failure of finance-capital between the two world wars. As the


theory of the last stage of capitalism, it helps to analyse the
movement away from capitalism where there is no hegemonic
type of capital accumulation. In particular the failure of periodic
crises to regulate the commodification of labour-power in the
stage of imperialism can help us to understand the necessity for
the Keynesian policies that developed after World War II.
The economic system that is dominant in the world today is
moribund quasi-capitalism. It has many features of capitalism,
but it also has many new features that are inadequately under-
stood if we apply the laws of motion of capitalism directly. Some
Marxists have debated over whether the current crisis should be
understood according to the declining rate of profit, under-
consumption or profit-squeeze. But this_ implies that it should be
understood primarily according to some economic laws. It seems
to me that this assumes that we are in a stage of capitalism and not
a phase of transition. The present crisis does have a structural
economic dynamic, but this dynamic also has essential political
and ideological dimensions. The economic dynamic should not be
analysed in isolation from the political and ideological factors,
and it cannot be adequately understood by any version of the law
of value.
Because of the influence of productivist readings of Capital,
many Marxists have not paid much attention to money. Money
was often seen to be the most determined and least determining
factor of the capitalist economy. For Marxists it was not money
that made the world go around, but rather it was the movement of
production that caused money to go around. Though there is
some truth to this simplistic posing of alternatives, productivists
have a tendency to treat money as a kind of passive reflex of the
realm of production. Sekine's Dialectic of Capital demonstrates
that money plays a crucial and active role in the law of value. But
because of productivist readings of Capital, Marxists have tended
to ignore money even in periods of capitalist history where the law
of value is hegemonic. This tradition unfortunately extends into
the phase of transition away from capitalism, when the monetary
system takes on increasing importance.
Socialists have often been defeated by the international mon-
etary system, and yet there are few Marxist studies of it. The Left
in general seems to have little understanding of the international
monetary system and its importance. Time and again progressive
254 Historical Materialism

governments have had to tum away from reform towards


austerity in order to protect their currency or stop capital flight.
The present socialist government in France is only the last in a
long and not so glorious line. It seems that progressive govern-
ments must find ways to break from the international monetary
system or at least protect themselves from its dictates that force
them to tum away from reform. This requires that the socialist
movement develop a stronger international dimension.
An important feature of the current international financial
system is its debt expansion. 4 World debt has been increasing in
geometric proportions. This debt system has little to do with the
law of value, except to show the extent to which the movement of
value (or perhaps pseudo value would be more accurate) has
become divorced from the requirements of economic life. Who
gets the loans, how much they get and the terms of the loan has as
much or more to do with politics and ideology as with economics.
As I mentioned in the last chapter, when capital accumulation is
undermined by the declining rate of profit in a crisis, capital tends
to dissolve into money. In an economic system where stagnation
or a kind of crisis is permanent then capital is continually
dissolving into money and its entire existence is tenuous.
Movements of money cut free from the requirements of
accumulation are not only destabilizing but may lead to
capricious, irrational and destructive uses relative to the needs of
real economic life.
There is little market discipline of large firms because they
cannot be allowed to go bankrupt for fear of jeopardizing the
entire debt system. States are in an even better position to
threaten the debt system because if they go bankrupt their assets
cannot be so easily seized short of armed invasion. The most
bankrupt countries still get loans in order to forestall bankruptcy.
In this way debt expansion becomes a vicious circle.
Those Third World countries which are safest for capital tend
to get the biggest loans. But 'safe for capital' generally means
military dictatorship with fascist qualities. Wages are kept down
by outlawing unions and strikes, while foreign capital is given
very favourable investment terms. The military might necessary
to impose such an order is costly and requires loans. The military
might is also necessary to maintain stability while taxing the
people to repay the loans. The debt economy is a truly reactionary
system. It leads to the misallocation of resources on a global scale
Transition to Socialism 255

while fuelling militarism and bolstering reactionary regimes. The


poor become poorer and more dependent on the rich. The reason
that a regime like the Marcos regime in the Philippines gets so
many loans is not because it is a model of democracy. Rather the
United States is interested in maintaining its military base, its
influence and the flow of interest payments. That the Marcos
regime is a dictatorship matters little as long as it maintains
'stability' and its 'friendship' for the United States.
Along with the international expansion of debt has gone the
international expansion of production. Capital seems to flow
more freely on a global level than ever before, but this flow is not
so much in response to the market as to political and ideological
factors. To a large extent the location of productive investments
follows the debt system. Those states that get large loans also tend
to get capital investment. Investment especially flows to low-wage
areas, 'free production zones' and to countries that provide tax
advantages and other special enticements. The trade union
movement is in a state of crisis because it has not kept pace with
the internationalization of production. The internationalization
of the trade union movement is a crucial step for the future
prospects of democratic socialism. This challenge is now placed
upon the agenda with a great deal of urgency.
The spectacular expansion of capital on a global scale after
World War II was fuelled by debt expansion. Continued fear ofa
global depression has caused the debt expansion to take off with a
frightening momentum of its own. The threat of runaway
inflation has caused states to tighten credit and contract their
economies. But this causes high unemployment with only a short-
run reduction of inflation. 5 The combination of high unem-
ployment and high inflation has been called 'stagflation'. Stagfla-
tion has been serious in even the most dynamic of the indus-
trialized nations, but it has been truly disastrous for many Third
World countries.
The law of value shows that capitalist crisis serves to replenish
the industrial reserve army and to introduce new and more
productive technology. With its austerity policies the modern
state has no trouble replenishing the industrial reserve army, but
how can the state bring about a renewal of fixed capital? The
problem is that the technology which is in the wings now is so
labour-saving that it may well complete the undermining of the
commodification of labour-power which is already quite advan-
256 Historical Materialism

ced. Much emphasis is placed upon the need for increased


productivity in order to lift us out of the swamp of stagflation, but
the prospects of automation raise the spectre of a truly intolerable
level of unemployment.
The burgeoning service sector also contributes to the current
crisis. Efforts to reduce its size in order to control inflation are
bound to be only marginally successful. Since in the long run the
production of commodities will be increasingly automated,
people-to-people services will expand as a proportion of the
economy even if much of the paper work and bureaucracy
traditionally associated with the service sector is automated.
Person-to-person services have always been difficult to manage
capitalistically precisely because they are not reified or com-
modified. Services can only be managed capitalistically to the
extent that they are commodity-like and can be treated as if they
were commodified. But if the more commodity-like and imper-
sonal part of the service sector is automated, what will remain will
increasingly be person-to-person services that are best managed
other than commodity-economically (e.g. education and health
care). Cutting back the service sector can only serve as a short-
term palliative to inflation. The continued development of the
need for person-to-person services as an ever larger portion of the
economy points away from a 'free enterprise' solution to the
current crisis.
That growth of the state sector which most bolsters the
continuation of 'free enterprise' is the military sector. 6 The
dependency of capitalism on this sector indicates the reactionary
character of capitalism in the phase of transition. Increasingly
capitalism depends upon the existence of repression and the
production of the instruments of repression. Capitalism wants to
buy security for itself through weaponry, but instead this only
increases the insecurity. This sets up a convenient dynamic where
the seeming insatiable need for security acts as a permanent
stimulus to military spending, and military spending is the
principle stimulus to the capitalist economy.
Military spending plays such a crucial role in the United States
as a countercyclical tool that the phrase 'military Keynesianism'
has been coined. 7 When the economy is in recession in the United
States and an election year is approaching, the Red menace can
easily be invoked to justify increased military spending which will
lift the economy out of recession. In the post-World War II period
Transition to Socialism 257

militarism is closely tied to anti-communism. International crises


such as the Greek civil war or the war in Korea were used as
occasions to whip up anti-communist sentiment and get ever
larger military appropriations passed by the u.s. Congress. 8
When it was clear that the Marshall Plan was not enough to get
the world economy (especially Europe) back on its feet after
World War II, the decision to re-arm provided the impetus.
Militarism also has a close tie with the debt economy since a lot
of the international debt is generated to support and expand
military apparatuses. Stronger military apparatuses are needed to
impose ever harsher austerity policies on the people so that
regimes can get further loans to payoff old debts piled up by
previous military spending. A vicious circle is created in which the
more poor nations get into debt, the more they need a strong
army to impose austerity. As the crisis deepens, moribund
capitalism comes to depend on militarism. At the same time as
Reagan mouths free enterprise ideology, he proposes a manned
space-station and the largest military budget ever to pull the
economy out of a recession in an election year.
Part of the current crisis of moribund capitalism is the
weakening of u.S. hegemony in the world economy. United
States domination is increasingly challenged by Japan, Europe
and the socialist countries. Since historically the international
economy has generally been stabilized by one hegemonic power,
in this period it is unclear how stability will be maintained. Since
the United States is not likely to give up its position of domination
gracefully, there is a real threat of war.
Last but not least the growing world-historic power of the
workers' movement and the socialist movement on a global scale
limits the options of moribund capitalism, shrinks the area of the
world where capitalism can operate and occasionally makes real
breakthroughs towards democratic soclialism. This trend must be
viewed over the long term because in the short term it develops
very unevenly. 'Solidarity' may receive a set-back in Poland, but
in the long term the so-called socialist states will democratize. The
Sandanistas have been victorious in Nicaragua, but they may
suffer set-backs due to U.S. power in the region. In the early 1970s
the trade union movement saw a surge of militancy, but in the
early 1980s the lack of internationalization, continuing austerity
policies and other factors have dealt a set-back to the trade union
movement. In the long term the popular democratic forces have
258 Historical Materialism

gained strength and will continue to do so as the irrationality of


dying capitalism forces them to reappropriate control over their
lives and societies.
This brief analysis of some of the dimensions of the current
crisis indicates that it is not like a periodic crisis explainable by the
law of value. In the phase of transition, crises become serious
threats to the entire system, unleashing revolutionary storms and
undermining what remains of capitalism. As the law of value
unravels, the global economy becomes more crisis-prone, and
crises become more intolerable. Since the system has no tendency
towards equilibrium, stability must be artificially maintained.
But the effort artificially to maintain stability in a crisis-prone
system creates a whole series of contradictions, some of which I
have already discussed.
A further contradiction that needs mentioning is between the
economic and the political. In Chapter 6 I argued that the basic
capitalist ideological form is the legal subject and the basic
capitalist political form is the rechtsstaat. If the material base of
these superstructural forms, the market, becomes undermined in
the phase of transition, then capitalist ideology will become more
shrill and defensive as it loses its grounding, and the capitalist
state will become less governable as it loses its legitimacy. The
increased management of the economy by the state including
austerity policies means that the state less and less appears to be a
neutral legal instrumentality. Legal ideology in general goes into
crisis because it is too formalistic to deal with the injustices of
dying capitalism. The legal subject becomes a fiction that not only
lacks a material base, but also can no longer even appear to serve
fair play. The contradictions between the basic capitalist super-
structural forms and the exigencies of moribund capital
accumulation need to be studied in much more depth.
The foregoing analysis indicates that the current crisis cannot
be understood by the law of value or by stage theory, and that
political and ideological factors playa prominent role. What is
needed is a structural analysis of the economic, political and
ideological dynamics of the current conjuncture guided by pure
theory and stage theory as reference-points that the present world
is moving away from. This section has dealt with some of the
complexities involved in both using and not using pure theory to
understand the present. Suggested by this analysis, but not
specifically focused upon, is the whole range of issues that have to
Transition to Socialism 259

do with the relation between theory and practice. It is to these


issues that I tum next.

3 THEORY AND PRACTICE

The question of the relation between theory and practice is closely


conn(:cted to the question of the relation between the logical and
the historical. This is because by 'practice' Marxists mean
primarily action aimed at bringing about socialism. But such
practice is an effort to change the future course of history; it is
history projected into the future. Practice is just a special kind of
history. It follows that the logical-historical method has, as a
corollary, the unity of theory and practice. Just as with the
former, this latter doctrine has produced confusion and strategic
errors throughout the history of Marxist theory and practice.
It is very common for Marxists to use the phrases 'the unity of
theory and practice' or 'the dialectic of theory and practice', but
the approach outlined in this book can lead to no such
unquestioning acceptance of these slogans, and indeed must find
them dubious. A critical analysis ofthese phrases, while revealing
certain valid and positive impulses behind them, also reveals
untenable conceptions that have not served Marxists at all well in
their world-historic struggle for democratic socialism. I have
criticized the 'logical-historical method' for its tendency to
collapse history into theory or theory into history, and have given
many examples showing that a too immediate and too close
connection between theory and history destroy the integrity of
each and results in either impoverishing theory or our understan-
ding of history or both. I have demonstrated that there is neither a
unity nor a dialectic between theory and history. However, I have
shown that there is a connection between theory and history, but
it is complex, involving the development of mediations and levels
of analysis. There is no direct interaction between theory and
history and there certainly is no unity or dialectic. This approach
to theory and history also applies to theory and practice since
practice is simply activist history or history with a view to its
future alteration through conscious human agency. The relation
between theory and practice is a direct corollary to the relation
between theory and history.
In so far as 'the unity of theory and practice' refers to a future
260 Historical Materialism

socialist society where the division of mental and manual labour


is broken down, and the separation between theory and social life
is reduced, I have no quarrel with it. However, Uno and Sekine's
levels of analysis approach demonstrates that 'theory' is internal-
ly complex. There are different types and levels of theory. The
theory of purely capitalist society is not unified with either history
or practice. That theory which is closest to practice is strategic
theory, but strategic theory is also that theory which is closest to
being not-theory. Strategic theory as the theory aimed at bringing
about socialism does not fall within political economy and
therefore is not directly informed by the law of value. Because it
develops primarily within the phase of transition away from
capitalism, strategic theory falls within the purview of historical
materialism. It is therefore an approach to change informed by
political economy, but is not a part of the science of political
economy. Furthermore, because strategic theory must be concer-
ned with the particulars of a concrete conjuncture, experiential
knowledge and practical wisdom playa major role. Theory and
practice do form a kind of unity with strategic theory, because
strategic theory is formualted at the juncture of theory and
practice. However, it would be a monumental mistake to treat
strategic theory as the paradigm case of 'theory' since it is a
borderline case close to being not-theory. As practice approa-
ches theory, it takes the form of an organized movement; and as
theory approaches practice, it takes the form of experimential
understanding informed by theory.
In order to be successful, theory must have a certain rigidity
and practice must have a certain flexibility. If we collapse the two
together, either the rigidity or flexibility must prevail. Stalin is a
good example of imposing the rigidity of theory on practice, and
Lukacs of dissolving theory into the exigencies of practice.
According to Stalin, historical materialism is a science like the
natural sciences. It studies the laws of social development, and is
capable of coming as precise a science as biology. Furthermore,
the party of the proletariat should guide itself in its practice by
making deductions from these laws. In this way socialism is
'converted from a dream of a better future for humanity into a
science. Hence the bond between science and practical activity,
between theory and practice, their unity, should be the guiding
star of the party of the proletariat.'9 This unity that Stalin writes
of favours theory since practice is to be guided by 'deductions'
Transition to Socialism 261

from the science of historical materialism. Practice is dogmatized


by imposing upon it the rigidities of theory.
In sharp contrast to Stalin, I have argued that historical
materialism cannot be constituted as an independent science
likely biology. Historical materialism is a materialist approach to
the study of history grounded in political economy. Even political
economy, which is a science capable of objective truths, cannot
directly make use of even the laws of motion of a purely capitalist
society for practical purposes. The law of value is not a
developmental law at all, and we can only begin to consider
developmental tendencies at the level of stage theory. But even
stage theory cannot be directly applied to practical activity in the
present conjuncture which is a phase of transition and not a stage
of capitalism. The dialectical approach of Uno and Sekine
precludes the direct application of the dialectic of capital as
suggested by Stalin and his example of biology. Non-dialectical
natural sciences can generate an applied science or engineering,
but a dialectic cannot. The anology with natural science and
engineering can lead to unfortunate forms of political practice
which aim to impose a plan on human material in the way that an
engineer imposes a blueprint on passive steel and concrete in
making a bridge. With the Uno/Sekine approach, even the level of
historical analysis within political economy can only serve as a
guide to strategic thinking and cannot be applied directly to
practical activity.
If Stalin tends to impose rigid theory on practice, Lukacs
commits the opposite error of subsuming theory to practice. In
History and Class Consciousness Lukacs writes:

theory is essentially the intellectual expression of the re-


volutionary process itself. In it every stage of the process
becomes fixed so that it may be generalized, communicated,
utilized and developed. Because the theory does nothing but
arrest and make conscious each necessary step, it becomes at
the same time the necessary premise of the following one. to

Lukacs sees Marxist theory as the direct expression of the


revolutionary process with the aim of changing reality. The
closeness oftheory to practice is emphasized by the metaphor that
pictures theory as the thought of the proletariat before each
world-historic revolutionary step. Theory, then can be nothing
262 Historical Materialism

but the self-conscious of the proletariat in the process of


revolution. As I argued earlier, this formulation makes it difficult
to distinguish between theory and practice at all, and in the end
theory and knowledge seem to be reduced to 'making'.
The Uno/Sekine approach illustrates the incorrectness of
Lukacs's claim that theory is the direct expression of the
revoltutionary process. Pure theory copies and completes the self-
reification of capitalism, and as a dialectic, it objectively grasps
the necessary inner connections of capitalism for all times. The
law of value does not change with each step in the unfolding
revolutionary process. This is not to say that there is no
connection between the dialectic of capital and history. It is no
accident that the founding work of the dialectic of capital was
written by Marx in England in the l860s. It was only with the full
development of industrial capitalism and with it the beginnings of
a socialist movement that it became possible not only rigourously
to theorize the material relations of capitalism but also to see
these material relations as reified social relations. The fact that
Marx was a socialist aided him in understanding reification and in
therefore seeing capitalism as a historically limited mode of
production. But the dialectic of capital is first and foremost an
objectively true theory, although a class ideology may be derived
from it. It may be that strategic theory is or ought to be the direct
expression of the revolutionary process, but it is inaccurate and
misleading to see the law of value in this way.
If theory is tied too closely to practice, both suffer as a
consequence. If theory is made directly to govern practice, then
practice takes on the rigidities of theory and will become overly
dogmatic, failing to relate to the diverse subjectivities that it is
trying to mobilize and to the diverse circumstances that must be
taken into account in order to make the most of each situation as
it develops. If practice is made directly to govern theory, then
theory comes under the unbearable pressures of political im-
mediacy and political expediency. Instead of striving for truth
and objectivity, theory strives for political correctness however
that may be defined in the existing conjuncture. In order to relate
to each other most effectively, the separate identities of
theoretical practice and political/ideological practice must be
maintained. Otherwise theory can dogmatize practice, and prac-
tice can underine the truth and objectivity of theory. In the case of
Lukacs and some critical theory, the spontaneism and subjec-
Transition to Socialism 263

tivity of practice is made to prevail over theory; and in the case of


Stalinism, the rigidity of theory is made to prevail over practice.
Thus critical theory and Stalinism are mirror images of each
other, each using the looseness of the 'unity of theory and
practice' for opposite but interdependent one-sided theories. My
resolution involves grasping the separateness of both theory and
practice, and the complex and complicated ways that they relate
to one another.
Besides strategic theory, another kind of theory which is
action-oriented is ethical theory. The basic principles of socialism
arrived at by superseding capitalist reification are ethical princi-
ples. They are ethical because their purpose is to guide human
behaviour towards a better society, but they are derived from an
objective science.
The dialectic of capital is first and foremost an objective
scientific theory which shows the inner workings of pure capital-
ism. But it is important to note that this theory is only possible
because of the reification of capitalism, and reification itself
makes the motion of things soveriegn over human beings.
Reification is an objective state of affairs, but it not only subjects
humanity to the violence of things, but subjects one class to
another as commodities to be used for extracting profit. The idea
of overcoming reification involves a moral point of view which
may be called 'humanism'. If one thinks that human beings
should be put before profits or that human beings should be
treated as ends in themselves and not as means, then one must be
opposed to the reification that is inherent to capitalism.
Although the idea of overcoming reification implies a moral
point of view, it is not moralistic because it involves working
towards a realistic possibility in the sense that the possibility, the
need to realize it and the possibility of realizing it are derived from
capitalism itself and not from anyone's subjective vision of the
ideal society. Therefore though theory is not the direct expression
of the revolutionary process, we see that even theory as objective
science, in this case, does suggest the transformation of the reality
it theorizes. Philosophers in the positivist tradition may find it
difficult to see how a theory can at the same time be scientific and
moral, but is this really so strange in the social sciences where we
are concerned with both how societies work and how to make
them work better?
The dialectic of capital is scientific because it traces the inner
264 Historical Materialism

logic of a society that is materialized and objectified. The


reification that makes this theory possible suggests the possibility
of de-reification where humanity re-appropriates control over its
own destiny. The basic principles of socialism must be ethical
even though they are derived from an objective science, and this is
because socialism depends upon the reassertion of the ethical.
Socialism depends upon humanity acting instead of being acted
upon; in this case action guided by ethical principles. The theory
of the transition to socialism is both scientific and ethical. The
ethical part is derived in part from the scientific and guides our
thought about the most desirable course of action. Marxian social
science not only serves as the basis for socialist ethics, but also
helps us to understand the pattern of objective resistances that
must be overcome in order to reach socialism. The theory of the
transition to socialism cannot therefore be an 'engineering'
precisely because of its ethical component which involves action,
purpose and intention.
That capitalism cannot reach the perfection of the ideal
environment of a purely capitalist society demonstrates that it can
ever only have a partial hold on history and the real economic life
of man, and that its continued expanded reproduction is therefore
problematic. The dialectic of capital is the objective ground of
Marxism, but the fact that it is possible to arrive at an obejctive
dialectic of capital already implies the need to transform a human
reality that can be so objectified. In this fashion an ethical
standpoint of radical criticism can be directly derived from the
very objectivity of the dialectic of capital.
The tradition of Marxist theory which is sometimes called
'critical theory' often argues that any theory that is objective or
factual must reinforce the existing state of affairs. II As a result of
this perspective, it follows that if we want to change reality, we
must adopt a point of view of radical criticism as opposed to
objectivism or scientism. Critical theory marks out its theoretical
terrain in sharp opposition to positivism (and Stalinism) which is
seen to epitomize reified theory which would reconfirm the
existing order and either deny the possibility of significant change
or understand change only according to a technological or
technocratic model. Critical theorists reject the positivist
paradigm because change is seen as a matter of applied science
and 'engineering'. The attack by critical theoriests on tech-
nocratic thought arises from laudable motives, but in so whole-
Transition to Socialism 265

heartedly attacking objectivism and scientism and all such


manifestations of reified thought, they tend to fall into the traps
of voluntarism, spontanism, utopianism and idealism, and at the
same time they destroy any basis for objectively grounding
Marxist theory. If Marxists had to choose between theorizing
that reinforced existing reality and theorizing that attempted to
overthrow existing reality, then they must side with the critical
theorists in favour of radical criticism. But these are not the only
choices, and to see them as the only choices involves a partial
acceptance of the subject/object split that lies at the base ofreified
thought. The need for theory to define itself entirely as radical
criticism is a desparate effort at the level of thought to overcome
the divorce between object and subject by dissolving the object
through a thought process that radically subjectivizes it. All too
often critical theory makes up for the lack of radical change at the
level of history by ever more radical and voluntaristic criticism at
the level of theory. For critical theorists the choice seems to be
between scientific thought which necessarily objectifies or pacifies
the subject, or radical criticism which subjectifies and dissolves
the object.
Part of the error of critical theorists comes from their adhering
too closely to the unity of theory and practice as proposed by
Lukacs. I have already argued that for Lukacs this unity proceeds
to the point where it becomes difficult even to distinguish between
theory and practice. Theory seems to take on the same transfor-
mative qualities as practice-theory like practice directly changes
the world. Thus theory like practice either conforms to the world
or goes against the established order. Since science, in the view of
the critical theorists, tries to conform to the world, they abandon
science to the bourgeoisie and are essentially left with artistic
rebellion.
In rejecting artistic rebellion as inadequate and limited, we are
not then thrown to the other extreme of positivism with its
technocratic models of change. To show that these are not the
options, let me consider Popper's engineering paradigm. Accord-
ing to Popper, we have three choices: no change at all (let it be),
piecemeal engineering, or utopian or holistic engineering. Popper
rejects the possibility of no change, and he underscores the
totalitarian horrors of holistic engineering, which leaves
piecemeal engineering as the only reasonable approach. 12 Implicit
in his critique of holistic engineering is a critique of Marxism, but
266 Historical Materialism

according to my interpretation of Marxist theory, it is not prone


to utopian engineering and that is because it rejects the engineer-
ing paradigm altogether. The dialectic of capital cannot directly
generate an applied science precisely because of the separation it
maintains between theory and practice. The dialectic of capital
reveals the law of value. This understanding can serve as an
objective foundation for stage theory, historical analysis and
Marxian social science generally. By seeing through the reifica-
tion that hides class domination, Marxist theory suggests the
possibility and desirability of socialism and can therefore guide
the building of a socialist movement. But, as I have argued,
strategic theory is theory which is closest to practice and to being
not-theory. It involves a significant experiential component and
cannot in any way be deduced directly from higher levels of
theory. In fact a dialectic is not like an axiomatic geometry at all-
stage theory is not deduced from pure theory and historical
theory is not deduced from stage theory. Each level of theory acts
as a guide and framework for lower levels of theory, realizing that
as we move from abstract theory to the real concrete, necessity
becomes increasingly qualified and weakened by contingency and
agency. Thus Marxist theory cannot directly generate an applied
science or an engineering; it can only help to guide a socialist
movement.
Furthermore, Marxist theory, as I interpret it, is not concerned
with 'long-range forecasting' or with establishing the inevitability
of socialism. The dialectic of capital can improve our study and
understanding of history and thereby can improve our chance of
constructing democratic socialism. By revealing exactly what
capitalism is and how it operates in its inner essence, the dialectic
of capital can serve to guide our understanding of the superses-
sion of that system or socialism. Based on the dialectic of capital,
we can see that socialism deserving of the name must be highly
democratic, and that bureaucratic 'socialism' is not really social-
ism. By suggesting the need to overcome reification the dialectic
of capital also suggests the idea of democratic socialism, but it
only suggests it as a historical possibility. The dialectic cannot
show that socialism is an inevitable or even likely outcome of
capitalism; all it can show is that from the point of view of the
realization of human potentials, it is a possible and desirable
outcome. Nor can pure theory tell us exactly what a socialist
society would look like; all it can do is indicate the general
Transition to Socialism 267
principles that would have to be realized in it. Historical
experience demonstrates that democratic socialism is in fact
difficult to establish and that though it is a force and movement in
the world, it so far only exists in primitive and partial forms.
Though the unity of theory and practice is a crude and
simplistic doctrine that breeds confusion, it is also incorrect to see
theory and practice divorced from each other. In this section I
have tried to explore the complex relations between theory and
practice and to explore problems with the unity doctrine. I have
also tried to show that Marxian scientific theory and moral
theory are complementary, and that the opposition between
positivism and critical theory can be transcended.

4 CONCLUSIONS

I want to end this chapter by briefly mentioning the important


contributions that Laclau and Mouffe have made to strategic
theory. According to them 'class reductionism' has produced
serious theoretical and strategic errors in the Marxist movement,
and instead of relying on narrow class rhetoric to mobilize people,
we need to rely more on democratic and populist appeals. \3
The dialectic of capital demonstrates that socialism is achieved
primarily by democratizing capitalist society. Now the class
composition of a democratic socialist movement will at least
partially depend upon the extent to which the society in question
is capitalist and upon how it is 'inserted' into the global economy.
These same factors will also affect the extent to which it can
actually achieve socialism. In the Chinese revolution it was
necessary that the socialist movement be peasant-based, and it
was also clear that given the level of development in China, the
road to the full realization of democratic socialism would be a
long one. In the case of advanced industrial countries, it is clear
that the socialist movement will be based on working people
broadly defined and on various oppressed groups all of whom are
hurt by the prevailing economy and have a strong interest in
democratizing the economy as well as the rest of society.
Theory acts as a distant guide, and the successes and failures of
a past and present practice act as a closer guide to the socialist
movement. A successful socialist movement must present realistic
possibilities of democratic transformation, and it must appeal to
268 Historical Materialism

those concerns that most move people in the here and now. It
must offer solutions that will make a real and substantial
difference to the lives of individuals. I whole-heartedly agree with
Laclau and Mouffe when they advocate a 'war of position' whose
strategy 'involves a plurality of democratic struggles, aiming to
change the relation of forces at all levels of society .. .'.14 We
must elaborate a strategy that can 'unite all the fragments of the
democratic movement' .15 I believe that this requires Marxists to
pay more attention to combating the hegemony of bourgeois
ideology. In general the Left must also be much more practical in
working out the paths of transition and at the same time display
the sort of leadership and ethical vision that moves people to
action.
The Uno/Sekine approach firmly establishes the scientificity of
Marxian social science while avoiding abuses of that scientificity
which have often led to dogmatism. As a stronger social science,
Marxist theory is a better guide to practice. But also, realizing the
limits of this science is an essential part of it, and it is this which
enables us to use theory as a guide while avoiding dogmatism. The
theory of pure capitalism establishes a more clear and precise idea
of socialism, and this may serve to overcome some of the disunity
on the Left. Understanding the transitional character of the
current phase can lead to a better understanding of its basic
character and dynamics. Seeing through the confusion connected
to the slogan 'the unity of theory and practice' not only clarifies
the relationship between theory and practice, but also supersedes
points of contention that have, for example, divided critical
theorists from more orthodox Marxism, or Marxist humanists
from structuralists. This new approach lifts the pall of dogmatism
that has always hung over Marxism and has deadened its creative
life-affirming impulses. At the same time it does not fall back into
eclecticism or skepticism, but instead offers an approach that has
a firm foundation while being capable of being responsive to the
conjunctural.
11 Conclusion
It should now be clear to the reader that the approach of Uno and
Sekine is not simply one more contribution to the tradition of
Marxian discourse, but instead constitutes a major reinterpreta-
tion. Political economy, dialectical materialism, historical
materialism and their interrelations are understood differently
from any of the perspectives that have been developed within
Western Marxism. Furthermore, I have argued that the Unoist
approach is superior to any that has been developed within the
West not only in being more scientific but also in overcoming
many of the unresolved oppositions and polarities that we find in
the Western tradition.
According to the Japanese reconstruction, political economy is
fundamental to Marxism, and the theory of a purely capitalist
society or the law of value is fundamental to political economy.
The fact that the theory of a purely capitalist society can be
constructed as a rigorous dialectic provides Marxist theory with a
firm and objective foundation. The law of value, however, cannot
be directly applied to history in the way one might apply a law of
nature to nature. Instead of generating an 'engineering', the
dialectic of capital externalizes itself in history by developing the
distinct levels of stage theory and historical analysis. The more
abstract level of theory offers orienting concepts and guidelines
for the more concrete level. Thus pure theory guides the
construction of stage theory. Stage theory is not deduced from
pure theory. The same can be said for the relation between stage
theory and historical analysis. Dialectical materialism is derived
from political economy in the sense that the dialectic of capital is
the only substantive theory which is both dialectical and material-
ist. This means that the ontology, epistemology and methodology
of Marxism are derived from analysing the logic of the dialectic of
capital. In other words dialectical materialism is the reconstruc-
ted logic of a substantive scientific theory and not an independent-
ly constructed philosophical system. Though only the theory of
269
270 Conclusion

pure capitalism follows a rigorous dialectical logic, political


economy as a whole follows a dialectical method in the sense that
the more concrete levels of analysis represent an externalization
of the dialectic in history.
Dialectical materialism demonstrates that historical material-
ism is not an independent science of history based on the laws of
social development. Instead historical materialism is simply a
materialist approach to understanding history based on the
science of political economy. Thus it is the law of value that is the
foundation of historical materialism and not some transhistorical
and general laws of sociohistorical development. It is the theory
of a purely capitalist society which clearly demarcates the
economic class so that historical materialism becomes a strong
hypothesis with clear and precise guiding principles and concepts.
Historical materialism, then, is not a science but an approach
derivative from the science of political economy.
That part of historical materialism which is concerned with the
transition to socialism and the relation between theory and
practice is rather myth-eaten and that is because of the prevalence
of the logical-historical method throughout the history of
Marxist discourse. Once we reject this method, it is possible to
sort out the polarity between Marxism as science and as radical
criticism. (In fact the science of political economy implies ethical
humanism.) It also becomes clear that the slogan 'the unity of
theory and practice' is a corollary of the logical-historical
method, and as such has been a source of error and confusion. The
most frequent tendencies towards error that flow from this slogan
are to subsume practice to theory as with Stalin or to subsume
theory to practice as with Lukacs. Those who simply emphasize
the interaction between theory and practice reduce all theory and
practice to the single case of strategic thought where there is a
close interaction. The relation between theory and practice is
complex because of multiple levels and types of both theory and
practice. It is misleading to reduce this complexity to the simple
unity of theory and practice. Some reflection on the complex
relation between history and the theory of a purely capitalist
society should be sufficient to indicate the crudeness of the idea of
the unity of theory and practice.
The Uno/Sekine approach to Marxist theory enables us to
resolve many recurring disputes in the tradition of Marxist
discourse. No problem has so troubled this body of discourse
Conclusion 271

than the relation between the logical and the historical. To escape
the tendencies towards both economism and politicism that flow
from the logical-historical method, we must reject the entire
problematic associated with this method. The approach that I
have outlined offers a new problematic based on levels of analysis
which enables us to supersede many ofthe confusions and debates
generated by the logical-historical method.
The Japanese approach that I have outlined also resolves the
debate between 'traditionalists' and 'Neo-Ricardians'. Tradition-
alists were correct to defend the labour theory of value, but Neo-
Ricardians were correct to reject the mathematical derivation of
prices from values. The theory of a purely capitalist society
provides a rigorous defence of the law of value while showing that
prices and values are determined simultaneously in the capitalist
market by technical data and 'the basic constraint'. Sekine's
rigorous dialectical reformulation of Uno's theory of a purely
capitalist society clarifies the precise meaning of the law of value
and establishes its objective validity.
Stage theory helps to sort out many issues in the study of
capitalist history, particularly issues surrounding the questions of
underdevelopment and imperialism. Stage theory enables us to
evaluate the strengths and weaknesses of the classical literature of
imperialism, and also to see that underdevelopment cannot have
any simple or exclusively economic explanation. Stage theory
demonstrates the general necessity to mediate the law of value
and historical studies with a distinct level of analysis. It shows us
how to externalize the dialectic of capital in history by concretiz-
ing the basic value/use-value contradiction. Finally stage theory
sheds light on the transition towards socialism and away from
capitalism. The difficulties in trying to construct a stage theory of
capitalism after 1917 and the clarity about precisely what
capitalism is, gained at the level of pure theory, indicate that the
period from 1917 to the present should be conceived of as a phase
of transition. This frees Marxian analysis of the current conjunc-
ture from inappropriate applications of the law of value or theory
of imperialism.
The historical analysis of capitalism must be conceived as a
distinct level of analysis and not a deduction from either stage
theory or pure theory. Recently E. P. Thompson and others, in
reacting against economism and reductionism, have rejected the
law of value as a guide to historical studies. In some cases the
272 Conclusion

reaction against theoreticism has gone so far that Marxian social


science is reduced to little more than the concrete analysis of
concrete situations. But it is a mistake to reject the guide offered
to historical studies by the law of value and stage theory. The
problem is not one of applying the law of value or not, but of
understanding how to use it, including its limitations. From the
point of view of the historical concrete, the law of value does not
explain historical detail, but it does offer an invaluable guide in
conceptualizing the flow of history. Not to see this is to discard
Marx's greatest scientific achievement, Capital.
Part of the reason why economism is so widespread with
orthodox Marxism is that Marx presented the law of value in
Capital as a purely economic law without a corresponding
analysis of capitalist ideology and politics. The Althusserians
tried to correct this by including the political and ideological in
their conception of the mode of production. But they never tried
to improve upon Marx's Capital, and therefore never arrived at a
precise theorization of the economic. Without this they could not
precisely theorize the political and ideological. The political and
ideological become semi-autonomous realms somehow
articulated with each other and with the economic in a kind of
uncomfortable limbo between the mode of production and social
formation. The problems with this approach can be traced
through the work of Poulantzas, which starts out attempting to
be rigorously structuralist and ends up being historicist and even
NeoGramscian. 1
By developing the passive state and ideological forms at the
level of pure theory, we do not start out with a purely economic
law of value which then has the political and ideological added in
ad hoc fashion at some more concrete level of analysis. By
precisely specifying the relation between the economic, political
and ideological at the level of pure theory, we have a clear guide
for integrating these realms at more concrete levels of analysis.
The logical-historical method has produced indescribable con-
fusion around the analysis of the capitalist state and ideology.
The levels of analysis approach can serve finally to move this
body of literature out of the cave and into the sunlight.
The discovery that the theory of a purely capitalist society is
both dialectical and materialist presents for the first time a firm
basis for sorting out questions of Marxist epistemology which
have often centred on dialectical materialism. There has always
Conclusion 273

been a tendency to apply dialectical materialism to all of nature or


all of history , but the only clear example of dialectical materialsim
that we have is the dialectic of capital. The dialectic of capital
provides an objective exemplar for clarifying the meaning of
'dialectical materialism' and for analysing the strengths and
weaknesses of contributions from other thinkers such as Lukacs,
Althusser and Colletti.
Dialectical materialism demonstrates that historical material-
ism must be derivative from political economy. Once we are clear
that historical materialism is not a science but is simply an
approach, we can focus our attention on the formulation of
guiding principles. This approach is in sharp opposition to the
one that tries to turn the concept 'mode of production' into the
central explanatory concept of the science of history. The concept
'mode of production' cannot bear such explanatory weight and
must therefore remain a confused and contested concept. F ollow-
ing Uno and Sekine, I do not try to construct the central concepts
of an independent science, but I derive some guiding principles
from political economy for the sake of developing a materialist
approach to the study of history.
All of the muddles and confusions of the logical-historical
method come to a head with strategic thought centred on the
transition to socialism. It is here that the unity of theory and
practice generates economistic and voluntarist mistakes that cost
lives and unnecessary suffering. In Western Marxism the split
between the scientism and positivism of orthodox Marxism and
especially Stalinism stands in stark opposition to the idealism and
voluntarism of critical theory. The approach I have developed
supersedes this polarity by showing that Marxism includes both
science and radical criticism. The science of political economy
implies a moral point of view, namely humanism.
Furthermore, clear strategic thinking requires clarity about
precisely what capitalism is, what socialism is and where we are
located in the current conjuncture of world history. The approach
I have outlined can establish this clarity. The meaning of
capitalism becomes clear and precise at the level of the theory of
pure capitalism, and the supersession of pure capitalism generates
the basic principles of socialism. These principles demonstrate
that crucial to the creation of socialism is the democratization of
social life. But the concrete problems confronting democratiza-
tion in the current conjuncture require not only the elaboration of
274 Conclusion

a socialist ethic but also an analysis of the complex structures and


dynamics that dominate this period of world history. Understan-
ding that the present period cannot be adequately grasped by
applying some mixture of the law of value and the theory of
imperialism is the first step in coming to grips with the complex
intermeshing of economic, political and ideological forces that we
face in the 1980s. In the light of this understanding we can
propose institutional alternatives to current institutional arrange-
ments.
Finally it is clear that Marxian social science can only serve as a
guide to a socialist movement or party. The transition to
socialism cannot be achieved without a movement and/or party
and this involves skills of leadership, communication and organ-
ization. It involves experience in working with people and it
involves practical wisdom. The approach to Marxist theory that I
have outlined is the basis for a more scientific and less dogmatic
Marxian social science, and this can serve to make a socialist
movement more enlightened and more successful. Furthermore,
in strengthening the scientific grounding of Marxism while
loosening up its body of thought, I present an approach that
offers firm directions while being flexible in dealing with par-
ticulars. In superseding many traditional disputes and polarities
this approach offers the possibility of a more unified Left - a
unity based upon a clarity and agreement concerning the basic
principles of socialism, while permitting much experimentation
and diversity at the level of practice in the efforts to democratize
the economy and all other areas of social life. This is a fresh
approach that overcomes old and deep divisions while establish-
ing greater clarity about the central thrust of our common
project. It is time for Marxists to abandon old and stale rhetoric
that is tied up with tiresome and petty in-fighting. This new
approach opens up the possibility for a rebirth of Marxism as the
creative life force that represents the interests of humanity for a
better future.
Notes
NOTES TO CHAPTER ONE: INTRODUCTION

I. As the most recent hegemonic paradigm, I give more attention to Althusser


and his followers than to other schools ofthought, though other schools are
certainly not neglected. My critical analysis of the Althusserian paradigm is
scattered throughout the book and is not concentrated in one chapter in
particular. Finally, although the Althusserian paradigm has declined for
good reasons, some of which I highlight in my discussion, I have the highest
respect for Althusser because of the scope of his undertaking and his lasting
contributions to Marxist theory.
2. The only text available by Uno in English is Principles of Political Economy:
Theory of a Purely Capitalist Society, trans. by T. Sekine (Sussex: Harvester
Press, 1980). His student Sekine has a number of texts available. His
immensely important The Dialectic of Capital is available from Yushindo
Press in Tokyo (1984). He translated and contributed an important
methodological essay to Uno's Principles. See also his 'The Necessity of the
Law of Value', Science and Society (Fall 1980); 'Uno-Riron: a Japanese
Contribution to Marxian Political Economy', Journal of Economic
Literature, vol. XIII (1975); The Circular Motion of Capital', Science and
Society (Fall 1981); (,The Law of Market Value'), Science and Society
(Winter 1982-3). Makoto Itoh has written a number of articles and a book
entitled Value and Crisis: Essays on Marxian Economics in Japan (New
York: Monthly Review Press, 1980). See also the following articles by
Canadian Unoists: B. Maclean, 'Kozo Uno's Principles of Political
Economy', Science and Society (Summer 1981); C. Duncan, 'Under the
Cloud of Capital: History Versus Theory', Science and Society (Fall 1983);
R. Albritton, 'The Dialectic of Capital: a Japanese Contribution', Capital
and Class (Spring 1984).
3. The School of Orthodox Marxism is much larger than the Uno School, but
the Uno School is probably the second largest in the number of professors.
There are also other significant schools of Marxian political economy such
as the Civil Society School.
4. The appraisal that the Uno School has 'lost momentum' comes from S.
Mawatari, 'The Uno School: a Marxian Approach in Japan', The History of
Political Economy Journal, forthcoming.
5. Some of Itoh's work focuses on the current conjuncture as opposed to
economic theory per se. Also Duncan's article 'Under the Cloud of Capital'
focuses on the relation between the approach of Uno and that of E. P.
Thompson.

275
276 Notes

6. According to Sekine, 'whoever carries Uno's tradition creatively in the


future must first go beyond him in pure theory; for this latter is the core of
Uno's contribution of which other parts are strictly derivative' (Uno,
Principles, p. xvi.

NOTES TO CHAPTER TWO: THE UNO/SEKINE


APPROACH AND MARX
I. For attacks on the law of value see I. Steedman, Marx After Sraffa (London:
New Left Books, 1977) and B. Hindness et al., Marx's 'Capital' and
Capitalism Today (London: Routledge & Kegan Paul, 1977).
2. E. P. Thompson, The Poverty of Theory and Other Essays (New York:
Monthly Review Press, 1978) and E. Laclau and C. Mouffe, 'Recasting
Marxism: Hegemony and New Political Movements', Socialist Review,
no. 66 (November-December 1982) carry out extended attacks on econ-
omism but from different points of view.
3. Uno uses 'commodity-economic principle' throughout his Principles. This
means the principles by which the market becomes self-regulating once it is
generalized and subsumes production. 'Commodity-economic principle',
therefore, roughly means 'market principle'.
4. K. Marx, Capital, vol. III (Moscow: Progress, 1971) p. 831.
5. Ibid., vol. II, pp. 108-9.
6. 'Intrinsically, it is not a question of the higher or lower degree of
development of the social antagonisms that result from the natural laws of
capitalist production. It is a question of these laws themselves, of these
tendencies working with iron necessity towards inevitable results' (ibid.,
vol. I, p. 19).
7. Ibid., vol. I, p. 89.
8. Thompson, Poverty of Theory, p. 153.
9. K. Uno, 'Types of Economic Policies Under Capitalism', unpublished,
partially translated manuscript; see also Uno, Principles, pp.173, 179.
10. Besides Sekine's Dialectic of Capital the major source for this argument is
Appendix I of Uno's Principles entitled 'An Essay on Uno's Dialectic of
Capital'.
11. This will be discussed in Part II.
12. This will be discussed in later chapters.
13. For example, see R. Rosdolsky, The Making of Marx's 'Capital' (London:
Pluto Press, 1977) and R. L. Meek, Economics and Ideology and Other
Essays (London: Chapman & Hall, 1967) pp. 93-106.
14. K. Marx and F. Engels, Collected Works, vol. 16 (New York: International,
1980) p.475.
15. Ibid., p.477.
16. K. Marx, The Grundrisse (Harmondsworth: Penguin, 1973) p.l0l.
17. Ibid.
18. Ibid.
19. Ibid., pp. 102-3.
Notes 277

20. Ibid., p. 103.


21. Ibid., p. 104.
22. Ibid., p. lOS.
23. Ibid., p. lOS.
24. Ibid., p. lOS.
2S. The relation between political economy in the sense of the theory of
capitalism and historical materialism as an approach to history generally
will be explored in Part III.
26. Ibid., p. 107.
27. Ibid., p. 107.
28. Ibid., p. 107.
29. Ibid., p.460.
30. Ibid., p. 107.
31. Ibid., p. 276.
32. Ibid., p.331.
33. Marx, Capital, vol. III, pp. 879-80.
34. Marx, Grundrisse, p. IS6.
3S. Ibid., p. IS7.
36. Marx, Capital, vol. II, pp. 108-9.
37. Ibid.
38. Ibid., vol. I, p.8S.
39. For a much more condensed version without the explicit dialectics, see
Uno's Principles.
40. K. Marx, Capital, vol. I, trans. by Ben Fowkes (Harmondsworth: Penguin,
1976) p. 1014.
41. Marx, Capital, vol. III (progress), p. 17S.
42. Ibid., p. 831.
43. 'Of course the method of presentation must differ in form from that of
inquiry. The latter has to appropriate the material in detail, to analyse its
different form of development, to trace out their inner connexion. Only after
this work is done, can the actual movement be adequately described. If this
is done successfully, if the life of the subject-matter is ideally reflected as in a
mirror, then it may appear as if we had before us a mere a priori
construction' (ibid., vol. I, p.28).
44. Ibid., p.667.
4S. L. Althusser, Reading Capital (London: New Left Books, 1970) pp. 11-71.
46. Marx, Capital, vol. III (Progress) p. 110.
47. Ibid., ch. xiv.
48. Ibid., pp.436-8.

NOTES TO CHAPTER THREE: THEORY OF A PURELY


CAPITALIST SOCIETY

1. Althusser, Reading Capital.


2. Sekine, Dialectic of Capital, vol. I (Tokyo: Yushindo Press, 1984).
3. With his distinction between 'capital in general' and 'many capitals'
278 Notes

Rosdolsky comes close to the concept of a 'purely capitalist society'. For


example, he writes that the sequence of categories in Marxian political
economy

do not have the slightest relation to 'external considerations', or the


conventional 'factors of production' theory of bourgeois economics.
Rather, they are the product of the inner nature of the capitalist mode of
production itself, of the historical and logical succession of the categories
which constitute it, and which in fact required - at least temporarily - the
dismemberment of the object of the analysis, especially at the outset,
where 'the essential issue was to grasp the pure, specific economic forms
and hence with not joining together things that do not belong together'.
(p.39)

The problem is that he combines the concept 'capital in general' with the
logical-historical method so that the relation between the law of value and
history remains unclear, and it is also unclear how one arrives at the concept
'capital in general'. Rodolsky remains so true to Marx, that he does not
really advance these issues beyond Marx's formulations except possibly to
focus our attention on them by emphasizing them within his book, The
Making of Marx's 'Capita/'.
4. See especially the articles by Jairus Banaji and Chris Arthur. Banaji firmly
rejects the logical-historical method and does see the logic of Marx's
Capital as dialectical, but unfortunately he has little real understanding of
dialectics and he stays too close to Marx's text rather than immersing
himself in the logic of capital. Thus he sees the movement from the category
commodity to the category value as a movement from 'Being' to 'Essence';
whereas as Sekine convincingly demonstrates the category 'commodity'
comes first only to locate the totality being theorized so that we move
immediately to the basic contradiction inherent in the commodity which is
between value and use-value and this parallels Hegel's 'Being' versus
'Nothing'. Furthermore, the Doctrine of Circulation parallels Hegel's
Doctrine of Being, the Doctrine of Production parallels the Doctrine of
Essence and the Doctrine of Distribution parallels the Doctrine of Notion.
The circulation-forms are all unmediated as are Hegel's categories in the
Doctrine of Being. Mediated categories only develop in the Doctrine of
Production which is centred on the capital-labour production relation.
Finally it is incorrect to describe the dialectical logic of capital as a continual
oscillation between appearance and essence since these categories are only
characteristic of the Doctrine of Production. Arthur tries to develop
differences between formal logic and dialectical logic in interpreting value-
form theory, but he does not actually develop the very close connection
between the logic of the value-form and sections of Hegel's Doctrine of
Being, nor does he explain the sense in which the logic of value-form theory
is 'the logic of the concrete'. See Diane Elson (ed.), Value: The Representa-
tion of Labour in Capitalism (London: CSE Books, 1979).
5. David Levine understands that 'The opposition of value and use-value is the
driving force which underlies the development of the entire system of
economic relations' [Economic Theory, vol. I (London: Routledge & Kegan
Notes 279

Paul, 1978) p. 76]. Also he understands that 'Systematicity is not imposed


upon the subject-matter but exists already implicit within it as its
determining principle' [Economic Studies (London: Routledge & Kegan
Paul, 1977) p. 15]. But Levine's reconstruction of Marx's Capital, though
dialectical in many ways, falls short of being a self-conscious rigorously
constructed dialectic. Furthermore, though his interpretation of value as
'the inner reflection, within the commodity, of the system of economic
relations as a whole' is essentially accurate, he does not see that the labour
theory of value can and should be made consistent with this conception of
value. Instead he confines the labour theory of value to essentially its
Ricardian form which sees value determined completely within the produc-
tion process and treats circulation as superficial and epiphenomenal
(Economy Theory, p. 5). Instead of trying to reformulate the labour theory
of value to integrate circulation as an important constraint on value
formation and augmentation, he abandons it, but this then runs the danger
of placing too much emphasis on circulation since there is no counterweight.
And this over emphasis on circulation could lead to a sort of Left version of
Keynesian underconsumptionism.
6. Itoh, Value and Crisis, p.45.
7. This is demonstrated by Sekine's Dialectic of Capital as a whole and there is
also a methodological discussion of dialectics in the 'Introduction' to
Dialectic of Capital and in 'An Essay on Uno's Dialectic of Capital' which is
Appendix I to Uno's Principles.
8. Sekine, Dialectic of Capital, vol. I, unpublished manuscript (1982) f. 4.
9. Marx, Capital, vol. I (Progress) pp. 18-19; see also K. Marx and F. Engels,
Selected Correspondence (Moscow: Progress, 1955) p. 177.
10. Ibid., p. 19.
11. Sekine, Dialectic of Capital, 'Introduction', unpublished manuscript (1982)
f. 18.
12. Marx, Capital, vol. I (Progress) p. 55.
13. This point is made forcefully in H. Watanabe, 'Logico-genetical Approx-
imation to the Analysis of the Unfolding of the Value-form', The Kezai
Gaku, Annual Report of the Economic Society, Tohoku University, Sendai,
Japan.
14. Uno, Principles, p.9.
15. Sekine, Dialectic of Capital, vol. I, unpublished manuscript (1982) f. 4.
16. See Ernest Mandel, Marxist Economic Theory (New York: Monthly Review
Press, 1970).
17. See R. L. Meek, 'Karl Marx's Economic Method', in M. C. Howard and J.
E. King (eds), The Economics of Marx (Harmondsworth: Penguin, 1976)
pp.114-28.
18. Sekine, Dialectic of Capital, vol. I, unpublished manuscript (1982) f. 19.
19. Ibid., p.24.
20. Ibid., p. 12.
21. Ibid., p.5.
22. Ibid., p.41.
23. Marx and Engels, Selected Correspondence, p. 179. Though Marx is
partially aware of the 'method of dialectic exposition', the three volumes of
Capital lack explicit and full consciousness of the dialectical method.
24. Uno, Principles, p. 14.
280 Notes

25. Sekine, Dialectic of Capital, vol. I, unpublished manuscript, f.201.


26. Sekine, Dialectic of Capital (Rosdolsky and Levine also emphasize this
point).
27. Sekine, 'The Necessity of the Law of Value', p.298.
28. Sekine, 'Uno-Riron', p. 864.
29. Sekine, 'The Necessity of the Law of Value', p.303.
30. Ibid., pp.289-9O.
31. Ibid., p.294.
32. For example, the debates between Wallerstein and Brenner or between
Bettleheim and Emmanuel.
33. Uno, Principles, pp. 52-3.
34. Uno, Principles, p. 53.
35. Sekine, Dialectic of Capital, vol. II, unpublished manuscript (1982) f. 212.
36. Rosdolsky, The Making of Marx's 'Capital', ch.30; Ernest Mandel, Late
Capitalism (London: New Left Books, 1975) ch. 1.
37. 'It is this confusion between the theory of circular flows and the theory of
equilibrium that seems to me to constitute the real source of errors. By
expressing all terms in value and not in actual labour expended, the
reproduction schema exclude the possibility of disequilibrium of any sort'
(Sekine, Dialectic of Capital, vol. II, p.403).
38. Ibid., p.369.
39. Ibid., p.408.
40. Ibid., p.370.
41. Ibid., p.461.
42. A good example of this is D. J. Harris's book, Capital Accumulation and
Income Distribution (Stanford University Press, 1978). To Harris's credit he
recognizes the importance of value categories at a time when many theorists
are rejecting them and he cautions us against 'attributing too much
significance to the scheme itself in its purely formal aspect' (p. 250).
However, Harris does go ahead and use the reproduction schema as his
central tool of analysis by developing them into an equilibrium model in
order to explore possible sources of disturbance and disequilibrium. The
theory remains completely agnostic about what actually causes capitalist
crises, and instead sees any potential disturbance as a possible cause of crisis.
But, as I have argued, most disequilibriums are overcome by the price
mechanism and it is only the commodities, fixed capital and labour-power
that the price mechanism cannot so easily regulate that give rise to crises.
Harris also recognizes the importance of supplementing his work with more
concrete and historical analysis, but he leaps from the abstract to the
concrete without any sense of levels of analysis so that he indiscriminately
makes the following list of social and historical factors which may cause
shifts in the all-important investment function: 'any change in method of
production, as well as the accelerator-multiplier effect of investment itself
and the effect of wars, but also the social mechanisms determining entry and
mobility within the capitalist class, various methods of "primitive"
accumulation, and the role of the state' (p. 268). On the one hand we have a
highly formalistic and agnostic theory about the causes of capitalist crises,
and on the other we have a 'grab-bag' of more concrete considerations. A
more fruitful approach, as this book argues, is to clarify the necessary causes
Notes 281

of capitalist crises in a purely capitalist society and then develop a more


concrete analysis by considering the typical predominant modes of capital
accumulation and state policies in the major world-historic stages of
capitalist development, and finally move to a more empiricalJconjunctural
level where very specific political, economic and ideological factors can be
taken into account.
43. Professor Nagatani pointed out to me that the expression 'value category'
can be misleading. This is because prices are introduced along with money in
the early stages of the dialectic. Thus price categories exist alongside value
categories from the beginning; however, they do not become substantially
differentiated from value categories until the Doctrine of Distribution and
the introduction of prices of production. When I use 'value category', then,
it is with the above qualification.
44. Sekine, Dialectic of Capital, vol. II, p. 44.
45. Ibid., pp.43-4.
46. Ibid., p. 37.
47. Ibid., p. 119.
48. Sekine, 'The Necessity of the Law of Value', p.299.
49. Sekine, Dialectic of Capital, vol. II, p. 3.
50. Ibid.
51. Ibid., p. 129.
52. M. Lippi, Value and Naturalism in Marx (London: New Left Books, 1979)
p.xx.
53. Steedman, Marx After Sraffa, p.25.
54. I. Steedman, (ed.), The Value Controversy (London: New Left Books, 1981),
p. II.
55. Ibid., p.98.
56. For example, see G. Pilling, Marx's 'Capital' (London: Routledge & Kegan
Paul, 1980). Anwar Shaikh's 'reiterative' method of solving the transforma-
tion problem is perhaps the most successful defence of the transformation
problem as it stands in Marx's Capital. See A. Shaikh, 'Marx's Theory of
Value and the Transformation Problem', in 1. Schwartz (ed.), The Subtle
Anatomy of Capitalism (Santa Monica, California: Goodyear, 1977).
57. Sekine, 'The Law of Market Value', pp.420-44.
58. I. Steedman, 'Positive Profits with Negative Surplus Value', Economic
10urnal(1975) pp. 114-23. This article is used to support argumentation by
Sraffian Marxists in Value Controversy.
59. Sekine, 'The Law of Market Value', pp.432-3.
60. Sekine, Dialectic of Capital, vol. II, p. 110.
61. Ibid., p. 104.
62. Ibid., p. 104.
63. Ibid., p. 104.
64. A briefer version is in Sekine, 'The Law of Market Value'.
65. Sekine, Dialectic of Capital, vol. I.
66. Ibid., vol. II, pp.222-4.
67. Uno, Principles, p. 112.
68. G. Hodgson, 'The Theory of the Falling Rate of Profit', New Left Review,
no. 84 (Mar.-Apr. 1974), is a good example of the position that argues that
the rate of profit has no more tendency to rise than to fall. Hoh notes in
282 Notes

Value and Crisis that a long-run tendency like the falling rate of profit
cannot explain the periodicity of crisis (p. 127). John Weeks, in Capital and
Exploitation (Princeton University Press, 1981), realizes that the theory of
crisis must be rooted in the theory of accumulation and cannot depend
entirely on the falling rate of profit taken by itself, and he also sees that it
must have something to do with fixed capital. But his analysis runs aground
because he fails to grasp the widening and deepening phases of accumula-
tion and instead sees a continual investment in fixed capital and technical
change that must devalue the old fixed capital so that 'The crisis was caused
by the fall in the rate of profit, resulting from the implicit devaluation of
means of production by technical change' (p. 212). But this conceptualiza-
tion of crisis is inadequate so that he falls back on formulations that sound
good but are actually quite empty such as: 'Crisis results from the uneven
development of capital ... capital as a whole comes into conflict with the
mutual interaction of its decentralized parts' (p.214).
69. E. O. Wright, in ciass, Crisis, a~d the State (London: New Left Books,
1978), takes the first steps towards relating crisis theory to the stages of
capitalist development. These are steps in the right direction, but his
periodization of capitalist development is not rigorously posed or convinc-
ing, and at the level of stage theory political factors must be accounted for.
Thus though it is accurate to argue that in the stage of imperialism capitalist
crisis becomes more underconsumptionist, one has to go beyond this and
investigate how crises themselves change in this stage and how their inability
to solve certain problems solved by crisis in pure theory builds pressures
towards imperialist war. Wright inadvertently falls into the economism of
the logical-historical method when he tries to smooth the debate between
the various interpretations of crisis theory by saying that the falling rate of
profit theory is most applicable to the mid-nineteenth century, undercon-
sumptionism is more applicable to the stage of imperialism and profit-
squeeze is most applicable to the post-World War II period. This kind of
application of economic models directly to history produces economism,
and he still avoids answering the question of which account of crisis best fits
the theory of a purely capitalist society. Also he really does not consider the
possibility that the fundamental nature of crises may change in different
stages of capitalist development.
70. This Will be discussed more fully in Chapters 4 and 5.

NOTES TO CHAPTER FOUR: STAGE THEORY


1. For comments on stage theory, see Sekine, 'Uno-Riron', pp.854-5,
869-70; Uno, Principles, pp. xiii-xiv, xxii-xxiii, xxvi-xxvii, 150-66, 173.
2. Sekine, Dialectic of Capital, p.67.
3. For example, Marx writes: 'the more perishable a commodity is and the
greater the absolute restriction of its time of circulation as a commodity on
account of its physical properties, the less is it suited to be an object of
capitalist production' [Capital, vol. II (Progress) p.131] and 'a rational
agriculture is incompatible with the capitalist system ... , and needs either
the hand of the small farmer ... or the control of associated producers'
Notes 283

[Capital, vol. III (Progress) p. 121]. Although Marx believes that capitalism
will be slow to penetrate agriculture and that it will generally be destructive
when it does so, still Marx believes that a more or less capitalist agriculture
will eventually develop at least some lines of production.
4. Some Japanese Unoists counterpose 'dominant mode of capital accumula-
tion' to my 'concretization of the value/use-value contradiction', but this is
because they do not fully understand the dialectical method made explicit by
Sekine. The value/use-value contradiction is not meant in some narrow
sense to refer only to the Doctrine of Circulation, but is the basic
contradiction of the dialectic as a whole. This basic contradiction takes
different forms in the different doctrines. In the Doctrine of Production the
value/use-value contradiciton takes the form of a contradiction between
historically specific circulation-forms and a universal labour and produc-
tion process, and in the Doctrine of Distribution it takes the form of a
contradiction between the heterogeneous forms of value required by the
market and the hegemonic and unifying character of capital as a whole. I
mean 'concretization of the value/use-value contraction' to be a summary
expression of the dialectic as a whole. So in considering a stage it is not
enough simply to concretize the circulation-forms. We need also to look at
the way the production process and circulation process combine to form a
reproduction process that assumes a dominant mode (concretization of the
Doctrine of Production), and to examine the ways in which capital
subsumes alien elements (e.g. land) and its own heterogeneity through the
market (concretization of the Doctrine of Distribution). Understood in this
fashion my 'concretization of the value/use-value contradiction' is broader
and more all-inclusive than 'dominant mode of capital accumulation' which
could be interpreted to refer mainly to the Doctrine of Production.
5. The implications of 'material-types' as opposed to 'ideal-types' and
'average-types' will be discussed in Section 3 below.
6. Uno, 'Types of Economic Policies Under Capitalism', pp.48-9.
7. Sekine, Dialectic of Capital, vol. I, pp.65-6.
8. Ibid., p. 67.
9. Ibid., p. 68.
10. Ibid., p.68.
II. Fred Block, The Origins of International Economic Disorder (Berkeley:
University of California Press, 1977), p.6.
12. Sekine, 'Uno-Riron', p. 854.
13. V. I. Lenin, Imperialism: The Highest Stage of Capitalism (New York:
International, 1979), p. 61.
14. According to Mawatari there are studies in Japanese that show this to be the
case. See Mawatari, 'The Uno School: a Marxian Approach in Japan'.
IS. R. Hilferding, Finance Capital (London: Routledge & Kegan Paul, 1981)
p.297.
16. G. Arrighi, The Geometry of Imperialism (London: New Left Books, 1978)
p.17.
17. Marx, Capital, vol. III (Progress) pp.436-8.
18. Hilferding, Finance Capital. This is the first English publication of this
important work, and this no doubt is part of the reason why English-
speaking theorists have given it so little attention.
284 Notes

19. For example, Hilferding does not distinguish between the functioning of
banks in a purely capitalist society and the more concrete imperialist stage.
He even goes so far as to claim that the more concrete 'finance-capital' is
more abstract than 'industrial-capital'. He writes: 'capital assumes the form
of finance capital, its supreme and most abstract expression' (ibid., p. 21).
20. Hilferding fails to distinguish between the laws of motion of capital and the
laws of the stage of imperialism thus confusing the type of necessity
associated with the two levels of theory.
21. For example he discusses (ibid.) legisation which gave such a prominent role
to the stock-market in the United States (p. 278), legislation against cartels
(p.412), the large economic territory of the United States (p.329), the
Monroe Doctrine (p. 327), immigration (p. 327).
22. Ibid., p. 366.
23. Ibid., p.367.
24. Ibid., p. 366.
25. See A. Brewer, Marxist Theories of Imperialism (London: Routledge &
Kegan Paul, 1980) p.87, and A. Hussain, 'Hilferding's Finance Capital',
Bulletin of the Conference of Socialist Economists (March 1967) p. 1.
26. Hilferding, Finance Capital, p. 313.
27. Ibid., p.21.
28. Lenin, Imperialism, pp. 16-17.
29. Ibid., p. 61.
30. R. Luxemburg, The Accumulation of Capital (London: Routledge & Kegan
Paul, 1963); R. Luxemburg, The Accumulation of Capital: An Anti-Critique
and N. Bukharin, Imperialism and the Accumulation of Capital (New York:
Monthly Review Press, 1972).
31. Luxemburg, Accumulation of Capital, p. 348.
32. Ibid., p. 359.
33. Luxemburg and Bukharin, Anti-Critique, p. 76.
34. Ibid.
35. Luxemburg, Accumulation of Capital, p. 371.
36. Ibid., p.416.
37. Ibid., p.446.
38. For example, see Brewer, Marxist Theories of Imperialism, pp.75-6.
39. Bukharin, Imperialism and the Accumulation of Capital., p.241.
40. Ibid., p.260.
41. Ibid., pp. 265-7.
42. Paul Baran and P. Sweezy, Monopoly Capital (New York: Monthly Review
Press, 1966) written largely during a period of reaction is one of the most
important and influential books on Marxian economics produced by the
American Left. Also it was one of the earliest works of the post-World
War II Marxian renaissance.
43. Baran and Sweezy, Monopoly Capital, p. 114.
44. Ibid., p.219.
45. A. Emmanuel, Unequal Exchange (New York: Monthly Review Press,
1972), p. 64.
46. C. Palloix, 'Multinational Firms and the Process of Internationalization',
unpublished translation, p.25.
47. Ibid. (emphasis added)
Notes 285

48. Wright, Class, Crisis, and the State, pp. 168-9.


49. Fine B. and L. Harris, Rereading Capital (London: Macmillan, 1979)
pp.109-1O.
50. Ibid., p. 112.

NOTES TO CHAPTER FIVE: THE HISTORICAL


ANALYSIS OF CAPITALISM

I. Hoh's Value and Crisis and various articles written by him touch upon
aspects of recent economic history such as the nature of contemporary
inflation, but otherwise no work of the Uno School on capitalist history is
available in English.
2. I. Wallerstein, The Modern World System (New York: Academic Press,
1974); Brenner, 'The Origins of Capitalist Development', New Left Review,
no. 104. Wallerstein's approach is clearly inadequate because it places all the
emphasis on the world market. Brenner's analysis is much stronger, but may
err on the side of not focusing enough attention on the realm of circulation.
3. The notion of 'fictitious commodity' comes from Polanyi's The Great
Transformation. This notion is used in the next chapter since it is especially
with regard to the 'fictitious commodities' that the law of value is likely to
need support from the superstructure.
4. For a historical analysis of the development of petty commodity production
of cotton in Uganda, see M. Mamdani, Politics and Class Formation in
Uganda (New York: Monthly Review Press, 1976).
5. Wallerstein, The Modern World System; Brenner, 'The Origins of Capitalist
Development' .
6. Brenner, 'The Origins of Capitalist Development', p.76.
7. Ibid., p. 77.
8. For a much fuller discussion of Althusser, see Chapter 8.
9. See Thompson, The Poverty of Theory.
10. For example, see A. Foster-Carter, 'The Modes of Production Con-
troversy', New Left Review, no. 107.
11. For example, see N. Poulantzas, Political Power and Social Class (London:
New Left Books, 1973).
12. See N. Poulantzas, State, Power and Socialism (London: New Left Books,
1978).
13. For example, most 'discourse analysis' and 'deconstruction approaches'.
See Laclau and Mouffe, 'Recasting Marxism'.
14. Hindness et al., Marx's 'Capital' and Capitalism Today.
15. Laclau and Mouffe, 'Recasting Marxism', p.94.
16. C. Palloix, 'The Internationalization of Capital' in H. Radice (ed.),
International Firms and Modern Imperialism (Harmondsworth: Penguin,
1975) pp.8, 25.
17. C. Palloix, 'The Self-expansion of Capital on a World Scale', Review of
Radical Political Economy, vol. 9, no.2 (summer 1977) p. 15.
18. Thompson, Poverty of Theory, pp. 59, 68.
19. G. Hodgson, 'The Theory of the Falling Rate of Profit', New Left Review,
no. 84 (Mar-Apr 1974).
286 Notes

20. Marx, Capital, vol. III (Progress), p. 831.


21. Thompson, Poverty of Theory, p.68.
22. Ibid., p.65.
23. Ibid., p.61.
24. Ibid., p.63.
25. Marx, Capital, vol. I (Progress), p. 19.
26. Thompson, Poverty of Theory, p. 153.
27. Ibid., p. 155.
28. Ibid., p. 163.
29. Adam Przeworski, 'Proletariat into Class: The Process of Class Formation
from Karl Kautsky's The Class Struggle to Recent Controversies', Politics
and Society, vol. 7, no.4 (1977) p.385.

NOTES TO CHAPTER SIX: THE THEORY OF THE


CAPITALIST SUPERSTRUCTURE

1. Uno believed that the theory of the state should be formulated at the level of
stage theory. Although the Japanese Uno School has not done much work
on the theory of the state, most work that has been done has abstracted the
capitalist state from the stage of liberalism which is closest to pure theory.
But Uno did believe that it was possible to root legal theory at the level of
pure theory. The pure theory of law would have three parts: civil law,
criminal law and public law. Unfortunately Uno never expanded further on
these ideas. In the approach I have developed, the state is only a legal form at
the level of pure theory. The institutional and policy content of the state can
begin to be theorized at the level of stage theory. It seems to me that this
approach is not contrary to Uno, and it has the advantage of showing that
the capitalist state in its inner essence is an ideological form - to be more
precise a legal subjectivity made sovereign by means of a legal fiction.
Furthermore, though the economic stands on its own at the level of pure
theory, it is backed up by the passive reflexes of the basic superstructural
forms. Because these forms become active and interventionist supports at
more concrete levels of analysis, it is important to theorize the relation
between the economic, political and ideological from the beginning. In this
sense pure theory is not really complete without the accompanying theory of
superstructural forms.
2. The German 'rechsstaat' seems more accurate that the English 'legal state'
or 'constitutional state' in describing the basic capitalist state form. The
derivation of this form will be analysed later in the chapter.
3. Marx, Capital, vol. I (Progress) p.88.
4. Ibid., p. 89.
5. C. B. Macpherson, The Political Theory of Possessive Individualism
(London: Oxford University Press, 1962); E.B. Pashukanis, Law and
Marxism: A General Theory (London: Ink Links, 1978).
6. Pashukanis, Law and Marxism, p. 100.
7. Marx, Capital, vol. I (Progress) pp. 88-9.
8. Pashukanis, Law and Marxism, p.80.
9. Ibid., p. 100.
Notes 287
10. Ibid., p. 152.
11. Ibid., p.45.
12. Ibid., p. 82. Based on the form of the legal subject we can also derive the
basic ethical form. Because legal subjects relate to each other externally and
impersonally through exchange and because competition may push posses-
sive individuals to exceed the laws of property, it is necessary that the law
become inward and that the legal subjects also recognize each other as moral
subjects or 'personalities of equal worth' (p. 151). According to Pashukanis,
'the rule governing transactions between commodity owners must penetrate
the soul of every commodity owner, must be his inner law' (p. 154). To the
extent that 'property must only change hands through mutual consent' is
internalized, we have a moral law that says 'treat others as ends in
themselves and not simply as means to your end'.
13. Ibid., p. 103.
14. Ibid., p. 113.
15. Ibid., p. 14.
16. Ibid., p. 104.
17. Marx, Capital, vol. I (Progress) p. 172.
18. The notion of 'class belonging' comes from E. Laclau, Politics and Ideology
in Marxist Theory (London: New Left Books, 1977).
19. This notion 'the legal subject writ large' comes from S. Wolin, Politics and
Vision (Boston: Little, Brown, 1960) p. 265.
20. Pashukanis, Law and Marxism, p. 14.
21. J. Locke, Two Treatises of Government, vol. 1, pp. 11, 106.
22. Ibid., voU, pp. 19, 222.
23. J. Shklar, Legalism (Harvard University Press, 1964).
24. Some thinkers in the Japanese Uno School think that the theory of the
capitalist state should be abstracted from the liberal stage of capitalist
development. But this approach fails to achieve the precision possible by
grounding the superstructural forms at the level of pure theory.
25. The idea of 'fictitious commodity' comes from Polanyi, The Great
Transformation. He has an unclear conception of money, but otherwise I
generally agree with this characterization.
26. Sekine, Dialectic of Capital, vol. I, p.461.

NOTES TO CHAPTER SEVEN: THE UNO/SEKINE


APPROACH TO DIALECTICAL MATERIALISM

1. W. T. Stace, The Philosophy of Hegel (New York: Dover, 1955) p. 88.


2. Sekine, Dialectic of Capital, vol. I (Tokyo: Yushindo Press, 1984) p. 251.
3. Ibid., vol.n, p.40, unpublished manuscript (1982).
4. Ibid., p.47.
5. Ibid., p.31.
6. Marx, Capital, vol. I (progress) p.682.
7. Sekine, Dialectic of Capital, vol. I, pp.49-50.
8. Ibid.
288 Notes

NOTES TO CHAPTER EIGHT: A CRITICAL ANALYSIS


OF SOME WESTERN APPROACHES TO DIALECTICAL
MATERIALISM

I. This tendency can be seen in the work of Della Volpe, Colletti and
Althusser, which sacrifice dialectics to materialism, and in the work of
Lukacs and critical theory which sacrifice materialism to dialectics.
2. O. Lukacs, History and Class Consciousness (London: Merlin, 1971) p. 16.
3. Ibid., p. 16.
4. Ibid., p. 17.
5. Ibid., p. 19.
6. Ibid., p. 20.
7. Ibid., p. 170.
8. Ibid., p. 83.
9. Ibid., p. 102.
10. Ibid., p. 120.
II. Ibid., p.23.
12. Ibid., p. 19.
13. Ibid., p. 3.
14. Ibid., p. 126.
15. Ibid., p.3.
16. Ibid., p. 180.
17. Ibid., p.205.
18. Ibid., p. 3.
19. Althusser, Reading Capital, p.24.
20. Ibid., p.61.
21. Ibid., p.77.
22. For the meaning of 'real opposition' see Colletti below.
23. L. Althusser, For Marx (New York: Vintage, 1969) pp. 198-9.
24. L. Colletti, Marxism and Hegel (London: New Left Books, 1973) p.22.
25. Ibid., p.27.
26. Ibid., p. 50.
27. Ibid.,p. 183.
28. Ibid., p. 122.
29. Ibid., p. 127.
30. Ibid., pp. 128-9.
31. Ibid., pp. 136-7.
32. L. Colletti, 'Contradiction and Contrariety', New Left Review, no. 93 (1975)
p.23.
33. Ibid., p. 25.
34. Ibid., p. 20.
35. L. Colletti, 'Some Comments on Marx's Theory of Value' ,in Schwartz (ed.),
Subtle Anatomy of Capitalism, p.464.
36. Ibid., pp.28-9.
37. Ibid., p.29.
38. Ibid., p.29.
Notes 289

NOTES TO CHAPTER NINE: SOME BASIC CONCEPTS


OF HISTORICAL MATERIALISM

1. Sekine, 'Uno-Riron', p.873.


2. B. Franklin (ed.), The Essential Stalin (London: Croom Helm, 1973) p. 312.
In the only Unoist remarks on historical materialism available in English,
Sekine also seems to derive the basic principles of historical materialism
from the 1858 Preface, but unlike Stalin he sees historical materialism as an
ideological hypothesis with 'a scientifically substantiated core' ('Uno-
Riron', p.873). This is the approach that I have adopted in this chapter.
3. For example, see E. M. Wood, 'The Separation of the Economic and
Political in Capitalism', New Left Review, no. 127 (1981); A. Levine and E.
O. Wright, 'Rationality and Class Struggle', New Left Review, no. 123
(1980); R. Miller, in T. Ball and J. Farr (eds), After Marx (Cambridge
University Press, 1984).
4. See Thompson, Poverty of Theory.
5. For 'norms of economic life', see Uno, Principles, p. 171.
6. Foster-Carter, 'The Modes of Production Controversy'; Brewer, Marxist
Theories of Imperialism, ch. II.
7. Althusser, Reading Capital, p. 317.
8. Foster-Carter, 'The Modes of Production Controversy', pp. 76-7.
9. P. Anderson, Passages from Antiquity to Feudalism (London: New Left
Books, 1974).
10. This point was explained to me by Professor Nagatani at a seminar at
Tohoku University in Sendai, Japan.
II. In Passages from Antiquity to Feudalism, Anderson writes:

the characteristic figure of a crisis in a mode of production is not one in


which vigorous (economic) forces of production burst triumphantly
through retrograde (social) relations of production, and promptly
establish a higher production and society on their ruins. On the
contrary, the forces of production typically tend to stall and recede
within the existent relations of production; these then must themselves
first be radically changed and reordered before new forces of produc-
tion can be created and combined for a globally new mode of
production ... the relations of production generally change prior to
the forces of production in an epoch of transition. (p. 204)

12. See Laclau and Mouffe, 'Recasting Marxism', p.91.


13. This includes primitive communism where there is no class because no
surplus and socialism where the surplus is democratically appropriated to
benefit the entire society.

NOTES TO CHAPTER TEN: TRANSITION TO


SOCIALISM

1. E. O. Wright, 'Capitalism's Future', Socialist Review, no. 68 (March-April


1983).
290 Notes

2. From a discussion with Professor S. Ohuchi at Tohoku University, Sendai,


Japan.
3. Sekine, Dialectic of Capital, vol. I, p.93.
4. No single Marxian text fully analyses the dynamics of the debt economy, but
a number of texts make important contributions. In particular see Cheryl
Payer, The Debt Trap (New York: Monthly Review Press, 1974) and The
World Bank (New York: Monthly Review Press, 1982); A. Sampson, The
Money-Lenders (London: Coronet, 1981); Block, Origins of International
Economic Disorder.
5. Block, Origins of International Economic Disorder, pp.203-12.
6. Many books deal with the importance of militarism in the latest phase of
dying capitalism, but one of the earliest and most influential is Baran and
Sweezy's Monopoly Capital.
7. Block, Origins of International Economic Disorder, p. 107.
8. Ibid., pp.73, 83, 103.
9. Franklin (ed.), The Essential Stalin, p. 312.
10. Lukacs, History and Class Consciousness, p. 3.
11. See especially H. Marcuse, One-Dimensional Man.
12. Karl Popper, The Poverty ofHistoricism (New York: Harper & Row, 1964).
13. E. Laclau, Politics and Ideology in Marxist Theory (London: New Left
Books, 1977).
14. Laclau and Mouffe, 'Recasting Marxism', p. 105.
15. Ibid., p. 112.

NOTE TO CHAPTER ELEVEN: CONCLUSION

1. For a good discussion of the Gramscian elements in Poulantzas, see Robert


Jessop, The Capitalist State (Oxford: Martin Robertson, 1982).
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Index
absolute surplus value, 62 choice of technique, 64
abstract/concrete, 60, 67 circulation, 52, 54
abstract labour, 17 -18,25,48,50, circulation-form, 49, 53, 60
191 circulationism, 52, 117, 123
accumulation, 56-8 class, 14, 127, 133-7, 150, 160,240,
agency, 78,116,119,121,130-2 252,263
agrarian capitalism, 75, 123 class consciousness, 202
agriculture, 74, 282-3n class reductionism, 126-8, 137,267
Althusser, L., 1,30,34,125-6,130, class struggle, 12-13,32-4,92-4,
197,206-13,219-21,227, 110-11,119,123, 128-37,
230-1,272-3 150,168,212,239-42
Arrighi, G., 94 classical economics, 27-8
automation, 256 Cohen, G. A., 236
average-type concept, 89 Col\etti, L., 197,213-18,221,273
commodity, 19-21,24,44,144,250
Baran, P. and Sweezy, P., 106-8, 114 commodification, 251, 256; see also
barter, 44, 46-7 de-commodification
base/superstructure, 13-14, 119, 126, commodification of labour-power,
141,156,238-9,242; see also 42,49-50,61,67-8,81,91,
economic (the) and 93, 117, 123, 144, 168, 236,
superstructure 251,255
basic constraint, 61 commodity-economic logic/
basic/non-basic goods, 56, 58 principle, 11,49,67,120, 157,
Bohm-Bawerk, E., 49,62 191,236,276n
Bortkiewicz, L., 65-6 commodity-form, 10-12,22,42,
boundary-problem, 232 44-7,53,59, 117, 120, 148,
Brenner, R., 117, 123 150, 152, 156, 166, 188
Bukharin, N., 94,104 competition, 54-5, 68
concentration, 13
capital, 13, 19-20,55,57,240,252; contingency, 12, 16,22,29,41,78,90,
see also Marx's Capital 116,120,179,182,186,190,193,
capital-form, 59,120,188 218
capitalism, 246, 273 contradiction, 67, 78, 88,182,187,
capitalist mode of production, 18, 189,209,215-17,252,258
47,67,104; see also mode of copy theory (reflection theory), 195,
production 219
capitalist superstructure, 139- 73; credit, 251; see also debt
see also superstructure crisis, 54-8, 83,102,168,251-2,
centralization, 13, 68, 84 255-8
296
Index 297

crisis - continued of the subject, 145-6


crisis theory, 67-71, 91 feudalism, 234
critical theory, 263-4 fictitious commodities, 117, 166-72,
current conjuncture, 249-60 248-52
finance capital, 84, 87 -8,95-6,
debt, 254-5 98-9,249-53
de-commodification, 70, 108, 167-8, Fine, B., 113
250,252 fixed capital, 54-8, 68-9, 84, 91, 167,
demand (supply), 49, 52, 68 255
democracy, 171-2,246-9,267-8, fodder method, 65-6
273 forces/relations of production,
de-reification, 246-9 234-8,242,252
dialectics (dialecticallogic), 14,24, form analysis, 142
29-30,52,59-60,67,99,131, formalism, 58,64,69,231,258
179-86,261-2,278n Foster-Carter, A., 231-2
dialectic of capital, 24, 37, 39-45, free enterprise, 252, 256
48-9,56,64-5,88-9,
112-13,157,177,187-90, general norms of economic life,
195,221,248,252,262-9,273, 229-31
278n, 283n Grundrisse (Marx's), 16-21,29,40
dialectical materialism, 5,41,
177-221,225,269,272 Harris, D. J., 280n
doctrine of being, 180-1 Hegel, G. W. F., 14, 16,40, 178-86,
doctrine of circulation, 40, 42, 48 - 54, 190-6,199,204-13,219
60,187-9,248 heterogeneous labour, 64
doctrine of distribution, 40, 42, 51-4, Hilferding, R., 94-8, 100, 104
61, 188-9,248 historical analysis, 5, 10, 14, 106,
doctrine of essence, 180 - 1 115-38,166-72
doctrine of notion, 180-1 historical materialism, 5, 14, 115,209,
doctrine of production, 40, 42, 225-68,270
48-54,60, 188-90,248 Hobbes, T., 151, 157
Hodgson, G., 63, 128
economic (the), 230, 238-9 humanism, 246-9, 273
economism, 10, 13,26,33,71-3,89,
100,105-9,112,115,124-7, idealism, 184-6,205,265
137,139-40,227,231,238, ideal-type, 87-8,108,218
271-2 ideology, 13-14,39, 79, 119, 140-8,
Elson, D., 40, 278n 151-73,239,272
Emmanuel, A., 108-10 imperialism, 32, 56, 71, 80-7,
ethics, 248-9, 263-8, 273, 287n 94-114, 164-5,271
excess capacity, 68, 84 stage of, 27, 79, 90-2,105,249-51
excess capital, 55, 68-9, 106,251 inflation, 251, 255-6
exchange-value, 44- 5 interest, 53, 58, 189-90
exploitation, 64, 66, 82, 145 rate of, 68, 251
expressive problematic, 125, 129,210 Itoh, M., 140, 281-2n

fetishism Japanese Marxism, 40


ofcommodities,21,53, 61, 144,200 joint production, 64
298 Index

Keynes, J. M., 253, 256 Marx's Capital, 5, 9, II, 14, 18,


Kuhn, T., 63 20-72,95,98, 100, 104-6, 113,
127,131,139,143-4,186,195,
Labour, 13,57,240 198,208-12,215,253,262,272
labour-power, 13,22,51,54-5,58, Marxian social science, 71, 268, 272,
69, 166,248; see also 274
commodification oflabour- material-type, 85-8, ll6-18
power mercantilism, 71, 77, 80-7,123,161
labour theory of value, 48 - 51, 60, stage of, 77, 91-3
64,191 militarism, 256
Laclau, E. and Mouffe, C., 126-8,267 mode of production, 103, llO, 113,
laissez-faire, 13, 14,83 125,226,228,230-4,242
land, 166-7,248,251 modes of production debate, 126,
law of population, 54-8, 67 221,230,232
law of value, 9-10,13-14,23,26, money, 41, 45-8,53,166-7,248,251,
29-33,37,51,54,61-7,71, 253-4
75-9,82,103,106, llO-13, ll6, money-form, 53, 59,120,188
120,125,128,130-3,196,230, monopoly, 32, 71, 84, 86, 89
249-55,258,266,269-72 monopoly capitalism, 99,105-7,
legal ideology, 149,258 ll4
legal fetishism, 149 Morishima, M., 65
legal subject, 128, 146-58,258
Lenin, V. I., 32,94-5,98-100,214 nation/nationalism, 159-62
levels of analysis, 5,9-10,13,23, necessity, 11-14,23,30,42,54,60,
31-3,36,70,78,105-7, lll-12, 76,90,119-21,183,193
115-21,217,259-60,271 neoclassical economics, 58
Levine, D., 278-9n neo-Ricardian (neo-Sraffian), 45,
liberalism, 71, 77, 80-7 271; see also Sraffian Marxism
stage of, 93, 163-4
Lippi, M., 63 object, 143-6
Locke, J., 157 objectivity, 64, 72,130,143-6,181,
logical and historical approach, 191,211-13,220,264,269,271
15-20,24-32,64,70,210-11, Ohuchi, S., 247
228,259,271 organic composition of capital, 54- 5,
logical/historical method, 15 - 16, 57, 70
29-32,52,96,98,100,104, ll2,
115,124,130,136-9,207,215, Palloix, c., 110-12, 128
218-19,232,245,259,270-3. Pashukanis, E., 146, 287n
Lukacs, G., 197-206,209-14,221, periodization, 112-14
260-2,265,270,273 petty commodity production, 74, 122
Luxembourg, R., 94, 100-4 phase of transition, 77-8, 85-7, Ill,
173,249-61,268,271
Macpherson, C. B., 146 political (politics), 119, 129,239,272
Mandel, E., 56 political economy, 5,19,36,73,115,
Market price, 58, 60, 62 192,220,225-6,241,260,
Market value, 60, 62 269-70
Marshall plan, 257 politicism, ll2-15, 125, 128-30, 133,
Marx and Engels, 9,15-35,143,178, 271
196, 199 Popper, K., 265-7
Index 299

post-capitalist modes of production, self-determining, 120, 180


225,228 self-regulating market, 11, 13, 38, 140,
Poulantzas, N., 125-6,231,272 246,250-1
pre-capitalist modes of production, self-revealing, 180, 191
18-19,225,228,234,246 service sector, 256
price of production, 57 - 62 Smith, A., 17,29, 191, 194
primitive accumulation, 81-2,102-3 socialism, 172,244-9,254,259,
production, 52; see also doctrine of 266-70
production socially necessary labour time, 49-50,
production relation, 60 57
productivism,50-2, 117, 123,253 Sraffa, P., 63
profit, 53, 190 Sraffian Marxism, 62-6, 71
rate of, 55, 189; see also tendency stage theory, 5, 10-14,32,73-114,
for the rate of profit to fall 116-19,134,158-66,169,249,
Przeworski, A., 135 271
pure theory: see purely capitalist stagflation, 255-6
society and theory of a purely Stalin, J., 227 -8,260-1,270
capitalist society Stalinism, 65, 124, 138,263,273
purely capitalist society, II, 13,23, state (state-form), 13-14,39,71,79,
25,36-9,50,55,70,75,108,116, 84-6,140-2,151-73,255,
140,159,232,264 286-7n
statism, 247
Steedman, I., 63-4
Reagan, R., 251, 257
strategic theory, 260, 266- 7,273
realization problem, 57 subject, 139, 143-6
rechtsstaat, 142, 153, 157, 160,258,
supersession, 245-6, 266
286n superstructure, 13, 125, 140-1, 156,
reductionism, 14,72-3 159; see also base/superstructure:
reification, 11-12,21-3,61,79,110,
capitalist superstructure
120, 130, 132, 134, 139, 144, 147, surplus population, 54- 5,68; see
166,169,184,191,200,204,215, also law of population and
217 -20,246,263-5; see also reserve army oflabour
commodification surplus value, 21,53,162
relative autonomy, 155
relative surplus value, 54, 62, 70
technology, 54,65,255
rent, 53, 58, 75,123,189,190
tendency for the rate of profit to fall
reproduction schema, 55-8,101-2,
(countertendencies), 3155,69,70
280n
territoriality, 159-61
reserve army oflabour, 55; see also theory
unemployment
of accumulation, 57-8
revolution, 204
of imperialism, 94-114; see also
Ricardo, D. (Ricardian), 23, 29, 50,
imperialism: stage theory,
52, 191, 194
of market value, 64
Rosdolsky, R., 39, 56, 278n
of pure capitalism (a purely
capitalist society), 2, 5, 26,
Sekine, T., 3,14,22,24,36,39,41-5, 33-73,103,116-17,120,126,
50-1,54-7,60-1,64-70,77, 235,240,246,260
80,108,140,178,219,253 of value, 9, 72
self-containedness, 116, 141, 180 theory/practice, 205, 259-68, 70
300 Index

Thompson, E. P., 12,34,128,130-2, use-value, 12, 14,38-44,67,75-84,


271 88,187,189,193,252
transformation problem, 58-63
transition to socialism, 205, 244-67,
value, 12, 14,38-44,53,57,59,60-1,
273
67,74-8,88,187-8,252,281n
value-form, 44-50,59
underconsumption, 106-8
value formation and augmentation,
underdevelopment, 108-110
60
unemployment, 255-6
value oflabour-power, 45, 70
unequal exchange, 82, 108-10, 162
uneven development, 109 voluntarism, 13,33, 137; see also
politicism
Uno, K., 1, 10, 12,31,36,47-9,
54-5,60-1,67,69,70,73,77,
80,83,105,108,140,186,226 wage, 55, 68
Uno's Principles, 14,36 wage-form, 53, 82
Uno school, 2-3, 73,115,140,198, Wallerstein, I., 117 -18, 123
226,245,275n, 283n, 286n, Weber, M. (Weberian), 64, 66, 87-8,
287n 108,127,157,164,184,218
Uno/Sekineapproach, 3-4, 9,15, Weeks, J., 282n
26,28,34,89,94,119,121, widening/deepening phases of
133, 139, 177 -96,226,230, accumulation, 54-8, 68-9, 91
261-2,268-70 Wright, E. 0., 112,247, 282n